PRIVATE BUSINESS

Broads Authority Bill

Order for consideration, as amended, read.
	 Amendments agreed to.
	 To be read the Third time.

Oral Answers to Questions

SCOTLAND

The Secretary of State was asked—

Broadcasting

Michael Moore: What recent discussions he has had with the Chief Executive of Ofcom on the future of broadcasting in Scotland.

David Cairns: The Secretary of State last met Ofcom's chief executive in September.

Michael Moore: For decades, Border Television has successfully provided news and other regional services to thousands of communities across thousands of square miles north and south of the border. Will the Minister join MPs from different parties, north and south of the border, who oppose ITV's plans to dismember the news and other services at Border Television? When he next gets the chance, will he impress on Ofcom that it must not be allowed to wriggle out of the very tight licence conditions originally imposed on ITV Border?

David Cairns: I am aware of the considerable concern about this proposal. I know that the hon. Gentleman has met Ofcom and Digital UK, and with others, including the shadow Secretary of State and my hon. Friend the Member for Dumfries and Galloway (Mr. Brown), directly lobbied Michael Grade. I have to say that I have a great deal of sympathy with what the hon. Gentleman says. He will know that it is not, of course, for Ministers to tell private companies where they should or should not have their bases, but it is for Ofcom to do so. As the independent regulator, it has a duty to look into these issues very seriously. It is undertaking a public service review of ITV, and I am pretty certain that this will figure very prominently in it.

David Mundell: I fully support the comments of the hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore) and I would like to reinforce the strength of feeling among viewers on both sides of the border and among politicians of all parties for the retention of Border news, which provides a unique and fiercely local service to this primarily rural area. Anything that the Scotland Office can do to influence Ofcom and support local campaigners who oppose Michael Grade's ill-thought-out merger with the Tyne Tees newsroom in Newcastle would be much appreciated. Does the Minister agree that Border TV is important not just as a local news provider, but as a demonstration that people in the south of Scotland and the north of England, who have common interests and common concerns, are best served by a cross-border United Kingdom approach to broadcasting rather than the separatist broadcasting agenda promoted by the Scottish Government?

David Cairns: On the hon. Gentleman's first point, I agree with much of what he says and cannot add much to what I said to the hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore) about the responsibility of Ofcom, which I hope it will take seriously. On the second point, the hon. Gentleman is absolutely right that it makes no sense to take Scottish broadcasters out of a UK market and make them foreigners in the English and Welsh media market. It makes no sense to take Scottish regulation of broadcasting, telephony and the internet away from Ofcom at a time when they are converging everywhere else. It makes no sense to embark on a course of action that would inevitably lead to the break-up of the BBC, and to the balkanisation of Channel 4, to be replaced by a Scottish broadcasting corporation that would be parochial, inward-looking and not what the people of Scotland want.

Anne Begg: With the absorption of Grampian TV into Scottish TV, I hope that the Minister will continue to make the case to Ofcom that the two separate licences covering the old Grampian and STV areas remain separate. As with the borders, the north-east of Scotland has its own news agenda and its own identity. There are certainly some fears that the separate identity of the old Grampian service could be lost in the bigger STV.

David Cairns: My hon. Friend is entirely right to say that Scotland is a nation of regions. What I believe the Scottish people want to see on the news is not the hoary old chestnut of the Scottish six, but more news that is truly local to where they live—whether it be in the north-east, the west or the south-west of Scotland. If there is money to be invested in news and current affairs—I sincerely hope that the BBC, and, indeed, ITV, will increase investment in news and current affairs in Scotland—it should be invested in local news gathering in the north-east, the south-west and the other regions of Scotland. That is preferable to pursuing some narrow agenda to break up British broadcasting, which would lower the quality of TV that our constituents get to watch.

Banknotes

Malcolm Bruce: What recent discussions he has had with the Chancellor of the Exchequer on the acceptance of Scottish banknotes outside Scotland.

Des Browne: I have regular discussions with Cabinet colleagues on a range of issues.

Malcolm Bruce: May I suggest that the Secretary of State impress on the Chancellor and the Governor of the Bank of England that it is high time Scottish banknotes were fully legally acceptable throughout the UK? They are authorised by the Bank of England and should have exactly the same status. If dollars and euros are acceptable to traders in England, surely Scottish notes can and should be, too. Will the Secretary of State endeavour to ensure that this anomaly is brought to an end?

Des Browne: I am delighted to have the opportunity to expand a little on the status of Scottish banknotes.

Andrew MacKinlay: And Irish ones.

Des Browne: And, indeed, banknotes from Northern Ireland. One of the great successes of the very successful financial services sector in Scotland is the privilege enjoyed by commercial banks to publish banknotes when other banks, including commercial banks in England, do not. The fact is that under the law Scottish banknotes enjoy exactly the same status as all other methods of payment throughout the United Kingdom, although that is not widely known. They are perfectly legal, and people should know and respect that. I know that on occasion some of my countrymen have had their banknotes refused, but I have been in London a great deal over the past 11 years, and in connection with my ministerial responsibilities have periodically had Northern Ireland banknotes in my wallet. No one has ever refused to accept one of them.

Ian Davidson: Does the Secretary of State agree that Scottish banknotes, collected by the Treasury in the form of taxes, could be used to pay for aircraft carriers from the Clyde shipyards? Did he see the headline in Monday's Glasgow  Evening Times? It read "We're Sunk", and below that, "Delays set to kill off Clyde yards in 2 years". Does the Secretary of State agree that that is simply dangerous nonsense, deliberately designed to undermine the position of the yards, and that those engaging in it are being unhelpful?

Mr. Speaker: Order. I think that the hon. Gentleman should engage in a letter to the Secretary of State, who can then reply to it. His supplementary is far too wide of the main question.

Ben Wallace: During his recent discussions with the Chancellor, did the Secretary of State discuss fiscal autonomy for the Scottish Parliament? Does he agree that handing over greater fiscal powers to Holyrood reeks of appeasement of the SNP, and that just one more devolutionary heave will not serve the Union or Scotland well?

Mr. Speaker: Order. These matters are far too wide of the question.

Alistair Carmichael: The Secretary of State says it is a matter of fact that Scottish banknotes can be accepted throughout the United Kingdom, and he is right, but it is also a matter of fact that often they are not. That was highlighted in an excellent article in the  Sunday Mail on 6 January. The paper conducted a random sample, and found that it was difficult to get notes accepted in Liverpool, Tadcaster, Coventry, Manchester, Ashton-under-Lyne and London, where even the railway ticket vending machines would not accept them. Will the Secretary of State acknowledge that although this may not be a massive problem, it is a source of embarrassment and irritation to many of our constituents every year, and will he use his office to address the problem?

Des Browne: I welcome the opportunity to repeat what I have already said. Scottish banknotes are legal, and enjoy exactly the same status as any other method of payment. The fundamental problem is that the law of contract throughout the United Kingdom allows people not to engage in a transaction at the point of payment if they do not wish to do so. I should be happy to join the hon. Gentleman and his party in a discussion about reforming the law of contract if that is what he wishes to do, although I suspect that we would find it difficult to obtain the necessary legislative time or the necessary support. But he is right: in the 21st century, this irritation should not exist for people who are tendering legal notes in payment. I think the best thing for us all to do is to take every opportunity to tell people that those notes are as good as anyone else's, and should be accepted.

Post Office Network Change Programme

Mark Harper: If he will make a statement on the progress of the Post Office network change programme in Scotland.

David Cairns: The Post Office launched the first of Scotland's area plans in October last year, and expects to complete the consultation process by September. Let me add, for the sake of completeness, that I understand that the plan for the Gloucestershire and Oxfordshire area, in which the hon. Gentleman's constituency falls, is due to launch a consultation next month.

Mark Harper: I am grateful for the Minister's answer, which ranged much more widely than Scotland. Is it not the case, indeed, that the consultation process in all parts of the United Kingdom, including my constituency—and, indeed, Scotland—is divisive, because it effectively pits one community against another? It has become clear that if a community saves one post office, another will have to close in its place. This is all about numbers, not about communities and their vital services.

David Cairns: No, I do not accept that. There are criteria laid down under which such decisions are taken, but we are not leaving this to market forces. If we were, only about 170 of the 1,200 post offices in Scotland would be left open. We are intervening with enormous amounts of taxpayer subsidy because we recognise the value of post offices in the communities they serve. However, we also recognise that people's shopping patterns have changed: people access services over the internet, which they did not do previously. To do nothing was not an option, but we are not leaving this to market forces; we are intervening, because we recognise that the post office plays a valuable role in many communities, particularly, but not exclusively, rural communities.

Eric Joyce: Is my hon. Friend content with the performance of Royal Mail deliveries in Scotland? I understand that there are various problems—one of which is that there have been only a handful of replies to the Scottish National party's "national conversation". The reason for that problem might not lie with the Royal Mail, but does my hon. Friend have a view on this question?

David Cairns: I was shocked to see that despite spending hundreds of thousands of pounds of Scottish—or rather, UK—taxpayers' money on its so-called national conversation, the SNP has had only a couple of dozen replies. The problem might reside in the Post Office, or it might reside in the fact that the people of Scotland repeatedly, in election after election, reject the option of breaking up Britain and the narrow nationalist approach of the SNP.

Angus Robertson: I think that people in communities the length and breadth of Scotland will note the fact that instead of standing up for post offices facing closure, the Minister engages in petty political posturing. Does he not agree that the consultation on closures is a complete sham? It offers the chimera of reprieve in one community, yet will close post offices in another. One community is pitted against another community; one village is pitted against another village. Why does the Minister not stand up for those post offices, instead of posturing?

David Cairns: The House will have noticed the hon. Gentleman referring to the national conversation as petty politics. I agree: it is petty, partisan, posturing politics of the worst sort. On the serious business of the Post Office, this Government have already committed £2,000 million to sustaining a post office network, and we have also committed a further £1.7 thousand million to that. That speaks of a Government who are passionately committed to seeing a post office network exist in Scotland and throughout the rest of the UK, in contrast to the hon. Gentleman's "do nothing" option, which would see the Post Office wither on the vine.

Charles Kennedy: May I draw the Minister's attention to the Post Office code of practice, particularly regarding temporary closures? There have been 12 such temporary closures in my area in the past three years, with a varying degree of outcomes; five of them are still outstanding. Does the Minister agree that it would be quite against both the spirit and the substance of the code of practice if the Post Office were to include such outstanding temporary closures in the current consultation, thereby denying local communities their say? Will he make that point in any discussions he has?

David Cairns: I shall be happy to make that point. It is important that there is a transparent process with objective criteria, so that local communities can see why a particular post office has been closed and why others have been kept open. I understand that in the highlands of Scotland there are 18 proposed closures out of a total of 198. If we were taking a purely commercial decision, that figure would not be anywhere near 198; it would be massively reduced. We are committed to providing the subsidy to make sure that the Post Office remains viable, but it is important that this is done in an objective way—that there is transparency, and criteria that are adhered to.

DARA (Almondbank)

Gordon Banks: What discussions he has had with ministerial colleagues on preserving the skills base at the Defence Aviation Repair Agency, Almondbank.

Des Browne: If I may say so, I find my discussions with Ministers in the Ministry of Defence among the most fruitful discussions that I have across Government. On a more serious note, any decision about the long-term future of the Defence Aviation Repair Agency will be based on what offers best value for defence and the best chance of longevity of employment for the work force. Accordingly, preserving the skills base at both Almondbank and Fleetlands is at the forefront of Ministers' minds in this process.

Gordon Banks: My right hon. Friend will be aware that the future ownership of Almondbank has been uncertain for some time. I seek an assurance that he will take into account all appropriate considerations about the skills of Almondbank's work force during the decision-making process, with a view to preserving those vital skills for the Scottish economy.

Des Browne: I do not think I can make it any clearer to the House that the shared priority focus of this decision is ensuring that the skill base is protected and preserved, and that the longevity of employment is at the heart of the decision. For very good reasons, which have been explained to my hon. Friend, the trade unions and others who are interested, it is the Ministry of Defence's view that the prospect of investment and additional work coming in to both Almondbank and Fleetlands is in the interests of work force longevity and the retention of the skills base. I am happy to tell him that Baroness Taylor of Bolton, the Minister with responsibility for this area, will be visiting DARA on Friday, and I am sure he will be able to have further discussions with her then.

Pete Wishart: Although Almondbank is in the constituency of the hon. Member for Ochil and South Perthshire (Gordon Banks), most of the people who work there are my constituents. They have great concern about the proposed privatisations. Will the Secretary of State take full account of the joint trade unions' proposals to keep DARA Almondbank within the public sector and reject a further privatisation, this time of this first-class facility?

Des Browne: I will not accede to the hon. Gentleman's request to make a decision on that basis. I shall make the decision on the basis of what best serves defence. That is my first priority and I am sure that it is his, particularly when young men and women from this country are risking their lives in operational theatres. That is my priority as far as public spending is concerned, and I am sure that it is his. Secondly, I shall ensure that we do our best to retain the very skilled work force at the facility, and give them an opportunity beyond what the prospective work programme offers them at the moment. I will take into account all suggestions that they make, but I will make the decision based on those two criteria. I would be happy to join the hon. Gentleman in discussions about this if he wants to have them, but he will not change my mind about those priorities.

Broadcasting

Katy Clark: What recent discussions he has had on the quality of television reception in Scotland; and if he will make a statement.

David Cairns: I have regular discussions with Ofcom and Digital UK about a range of matters in relation to broadcasting.

Katy Clark: My hon. Friend will be aware that problems remain with television reception in parts of Ayrshire. Will he outline what steps are being taken to ensure good television reception in as many households as possible, both before and after digital switchover?

David Cairns: My hon. Friend is right. The whole point of digital switchover is to give people better television: better reception, more choice and more interactivity. I know her constituency well, because it borders mine, and I know that many people in north Ayrshire have difficulty accessing a decent signal. It is difficult to say with any degree of exactness what will happen before switchover, but I sincerely hope that they will see an improvement in the quality of their television reception and in the range and number of channels that they receive once we reach digital switchover.

Robert Smith: As the Minister knows, the other advantage of digital television is that audio description will enable those with poor sight to enjoy the experience of television far more effectively. The Government have set a very low threshold for what broadcasters have to provide. What are the Government doing to encourage greater take-up of audio description and to improve ease of access to the handsets for those with disabilities?

David Cairns: The hon. Gentleman is right. I mentioned the interactivity that comes with digital TV, and things such as audio description are a key part of that. I have had discussions with the Royal National Institute of Blind People Scotland, which has been campaigning on this for some while. Just as there is now complete acceptance of subtitles for the hard of hearing, audio description for people with visual impairment must become standard. That will happen, to any meaningful degree, only when we switch off the analogue signal and boost the digital signal. The hon. Gentleman is right to keep campaigning on the issue, and I shall ensure that Ofcom is aware of his concerns.

Brian H Donohoe: As you know, Mr. Speaker, Tarbolton, in my constituency, is closely associated with Robert Burns—but none of my constituents could be called a
	"Wee, sleekit, cow'rin', tim'rous beastie".
	They are not slow at coming forward to tell me that the TV reception is appalling. What will the Minister do for the good people of Tarbolton?

David Cairns: In a week when we celebrate the great Ayrshire poet, Robert Burns, I am sure that the people of Tarbolton will be enjoying those celebrations. Of course, the first ever Burns supper was in Greenock, in my constituency, so we lay claim to having set the tradition. The people of Tarbolton, along with those throughout Ayrshire and the rest of Scotland and the UK, will benefit when digital switchover happens. It will provide more channels, more services, more interactivity and more choice.

Ministerial Meetings

Daniel Kawczynski: If he will make it his policy to make a regular report to the House on his discussions with the First Minister of Scotland.

Des Browne: I regularly report to the House on matters relating to the interests of the people of Scotland, and shall continue to do so.

Daniel Kawczynski: I thank the Secretary of State for that answer. It is important that those of us who are not members of the Select Committee on Scottish Affairs, if we have an interest in Scotland, be kept abreast of the Secretary of State's important meetings with the important First Minister. Will he ensure that we receive those regular reports?

Des Browne: Perhaps the business managers and others in the hon. Gentleman's party will consider that to be a bid to join the Scottish Affairs Committee. I know that his party has had difficulty recruiting people to that Committee in the past, so he may well shortly find himself on an elite list. He is right to say that Ministers should be accountable. I believe in that—and I know that he knows that. I have given an undertaking to the House that I will ensure that it is aware of such discussions when they take place, and I will do so.

Rosemary McKenna: Will my right hon. Friend take the opportunity, when he meets the First Minister, to explain that the Government have doubled the budget of the Scottish Executive since devolution—with a real-terms increase this year—and to remind him that it is time to start delivering for the people of Scotland?

Des Browne: I agree wholeheartedly. I noticed a headline in the Scottish media this morning on the subject of Budget considerations in the Scottish Parliament. It stated that the Scottish Parliament would decide how to spend a £30 billion budget. I recollect that that is exactly double the amount that Donald Dewar had to spend as First Minister when devolution first started in Scotland. That is a measure of the scale of the investment that the Government have made in Scotland and of the opportunities to build Scotland's infrastructure. The people of Scotland will not forgive the minority Administration if they do not spend that money wisely on the priorities of the people of Scotland, rather than on what the hon. Member for Moray (Angus Robertson) called a petty bit of political posturing.  [ Interruption. ]

Mr. Speaker: Order. I appeal to both sides of the House, as the noise is far too loud.

David Mundell: When the Secretary of State next has a discussion with the First Minister, will he convey to him in the strongest terms the anger and disappointment felt in constituencies such as mine because of the SNP Government's petty political posturing on nuclear power and their ill-thought-out approach to waste, which have already led to Scotland being written off by prospective investors in next-generation power stations? Will the Secretary of State make it clear to the First Minister that his policies will lead not only to questions about whether Scotland can be self-sufficient in meeting its fuel requirements, but to economic consequences through the loss of the skills and expertise that have been built up by the nuclear industry in Scotland over many years?

Des Browne: I am sure that the First Minister reads  Hansard—he will certainly read Scottish questions. I shall refer him to the hon. Gentleman's question, among other things, when I meet him on Friday. The hon. Gentleman is quite right. We know that 40 per cent. of the electricity generated must come from nuclear. We know that the future of our energy and climate change policies depends on energy conservation, but it also depends on the sustainable production of energy. Those who have thought the matter through and understand that a balance is needed know that nuclear energy will have to contribute to that. We have to ensure that the people of Scotland do not rue the day that the nationalists tried to deny them the opportunity of that sustainable future.

Jim Devine: When my right hon. Friend meets the First Minister, will he remind him that full employment is this Labour Government's priority, and refer him to the report produced at the weekend, which was endorsed by Dr. Ewan Macdonald of Glasgow university? The report states that the impact of unemployment on a person's health is the equivalent of smoking 200 cigarettes a day.

Des Browne: My hon. Friend is absolutely right. Decades ago, the Black report said that there was a correlation between ill health and poverty, and there is an obvious link between poverty and employment opportunities. That is why we are so proud that the Government's economic policies and the stability that they have generated across the UK have made such a significant difference to employment, and consequently to unemployment.

PRIME MINISTER

The Prime Minister was asked—

Engagements

Stephen Crabb: If he will list his official engagements for Wednesday 23 January.

Gordon Brown: Before I list my engagements, I am sure that the whole House will join me in sending our profound condolences to the family and friends of Corporal Darryl Gardiner of the Royal Electrical and Mechanical Engineers, who was killed in Afghanistan on Sunday. His death reaffirms our deep gratitude to those who have lost their lives in the service of our country. Our thoughts are also with Corporal Gardiner's five colleagues who were injured in the attack.
	This morning, I had meetings with ministerial colleagues and others, in addition to my duties in the House. I shall have further such meetings later today.

Stephen Crabb: I join the Prime Minister in paying tribute to Corporal Darryl Gardiner.
	Will the Prime Minister please tell us what exactly is happening on Britain's streets when the Home Secretary needs an armed police escort to go and buy a kebab?  [ Interruption. ]

Julian Lewis: Skewered!

Gordon Brown: I want everyone in Britain to be, and feel, safe on our streets. Crime is down 32 per cent. since 1997, and violent crime is down 31 per cent. There are more police than ever in our country, and we will do everything in our power to ensure the safety of our citizens.

Eric Martlew: My question is about flood defences. When a community has been flooded, the people there feel great fear and anxiety the next time there is heavy rainfall. That happened in Carlisle on Monday. Parts of the city have good flood defences, and extra defences will be put in place where they are needed, but what is happening nationally? The Government have massively increased funding for flood defences since last year's tremendous downpours, but that will not be enough.  [ Interruption. ] Will the Prime Minister assure the House that he will look to the insurance companies and local authorities for other funding sources? Will he review— [ Interruption. ]

Mr. Speaker: Order.

Gordon Brown: I sympathise with those of my hon. Friend's constituents who are facing floods, and with everyone around the country who has been hit by them. Sir Michael Pitt has undertaken a review of our policies since last summer's floods, and we will implement all his recommendations. However, expenditure on flood defences was £300 million in 1997: this year, it is £600 million, and it will rise to £800 million in 2011. That means that more than £2 billion will be spent on flood defences in the next three years, and of course we will consult with local authorities to ensure that the money is spent in the best way.

David Cameron: I join the Prime Minister in paying tribute to Corporal Darryl Gardiner, who was killed in southern Afghanistan on Sunday. He died serving our country.
	Taxpayers have the right to know what their total exposure is under the Prime Minister's latest plan for Northern Rock. Let us be clear: the rescue package is as much for his reputation as it is for the business. If the bonds are not paid back, and if Northern Rock fails to meet its obligations, what is the total exposure? How much?

Gordon Brown: The loans and bonds are secured against the assets of Northern Rock, which, as everyone understands, has a high-quality loan book. It is our intention to get the best deal for taxpayers: they will get their money back, and make a profit.

David Cameron: The Prime Minister will not tell us how much the taxpayer is in for, but the figure is £55 billion. Effectively, he has lumped every household in the country with a second mortgage. Taxpayers want to know how long it will be before they are off the hook, so will he say how many years it will be before the bonds are repaid?

Gordon Brown: We would be the first to be repaid under the scheme. The loans and the bonds are secured against the assets of Northern Rock. I think that the right hon. Gentleman should think very carefully about what he has been saying about Northern Rock. In September, he said that he was wholeheartedly behind our proposals to save the company. Then, in the last few weeks, he and his shadow Chancellor have toyed with nationalisation, administration and a private sale. Is it not about time that the Opposition were consistent in their thinking about Northern Rock?

David Cameron: The Prime Minister talks about changing positions, but last week he was all in favour of nationalisation. Then, he gets a tough time at Prime Minister's questions, he gets on an aeroplane with Richard Branson and he drops the whole plan. The Prime Minister will not tell us how much taxpayers are in for or how long they will have to wait to get their money back. It is like a used car salesman who will not tell someone the price, will not tell them the mileage, and will not give them a warranty. He has gone from Prudence to Del Boy without even touching the ground. This deal depends on a massive effective subsidy from the British taxpayer to Northern Rock shareholders through either lower borrowing or a guarantee. So can the Prime Minister tell us how much that taxpayer subsidy is?

Gordon Brown: The loans and the bonds are secured against the assets of Northern Rock. It is as clear as that. If I may say so, the reason why we intervened is the reason why we still are intervening: to secure the stability of the economy. I believe that all parties in the House should be in favour of ensuring that what happened at Northern Rock does not spread to the rest of the economy. I believe that all parties in the House would want to ensure that the depositors of Northern Rock and other building societies are protected, but what we are now seeing is the height of opportunism on the part of the Conservative party. One day it favours nationalisation; another day it favours a private sale; then the shadow Chancellor says that his favoured option is now administration. Let me just tell the House what administration means. It means a fire sale of the assets, it means closing down the company and it means the Government losing billions of pounds. It is the worst possible solution and the Conservatives are not only guilty of inconsistency, but guilty of putting the stability of the economy at risk.

David Cameron: The fact that the Prime Minister will not answer a single question just shows what a dodgy deal this is. He asks about administration. Does he not understand that administration and liquidation are different things? Let me put it this way. Administration is what the Government are in at the moment; liquidation is what is going to happen by the British people at the next election.
	The more people hear about this deal, the more they realise that it is a complete con. The Prime Minister is taking a lot of debt, packaging it up and selling it off as bonds. This is a sub-prime deal from a sub-Prime Minister. Let us see whether he can just answer this one simple question. Can he at least tell us what fee is being paid to Goldman Sachs?

Gordon Brown: That is a matter of negotiation between the Treasury and Goldman Sachs, and it will be published at the right time.
	Let us look at the Opposition's policy of administration. Administration means a fire sale of the assets; it means selling off the assets at the bottom of the market and losing billions of pounds of money. The shadow Chancellor rejected administration in November but is now proposing it in January. The Opposition's policy is the worst possible policy for dealing with the problem and they have flip-flopped between nationalisation, private sales and administration. They have no credibility on the economy and the reason why we intervened is the reason why we think that the economic record of this Government is a good one. For 10 years we have preserved the stability of the economy. The figures out today show that growth in Britain was 3.1 per cent. last year, and it is the highest growth of the G7. We have more people in employment than ever before and we have lower inflation than our major competitors. That is the recipe for moving forward, not the flip-flop policies of the Opposition.

David Cameron: Only this Prime Minister could talk about low inflation when families filling up at the pumps are paying £1.07 for a litre of petrol. People wonder what planet he is living on.
	The Prime Minister will not tell us how much the taxpayer is liable for, he will not tell us for how long the taxpayer has got to prop up this business, he will not tell us what the subsidy is and he will not say how much he will pay to Goldman Sachs. Will he at least say this: in retrospect, does he recognise that it was a complete error of judgment to get on an aeroplane with one of the principal bidders, Richard Branson, and fly round the world?

Gordon Brown: Not at all, and just remember that the Opposition supported our policy in September and October, but for opportunistic reasons, they have moved against it. Let me tell the right hon. Gentleman about inflation in the economy. Inflation in Britain is 2 per cent. In the Euro area it is 3 per cent., and in America it is 4 per cent. We have kept inflation low because we have made the difficult decisions that the Opposition would never face up to. As for the economy, his own adviser—the arts spokesman for the Conservative party—said only yesterday:
	"in the 90s...what killed people were paying 15 per cent. interest rates on their mortgages."
	That was under the Conservative Government. He continued:
	"Now, there is no reason for interest rates to go up excessively...because we...still live in a low inflation economy."
	That is what a Conservative party spokesman said. The right hon. Gentleman should acknowledge that that spokesman is right and he is wrong.

David Cameron: What everybody knows is that taking one of the principal buyers of the business round the world was bad judgment. The deal is bad judgment, and the worst judgment of all was leaving Britain with the highest budget deficit in Europe at a time of economic difficulty. The Prime Minister is now synonymous with delay and dithering. Is not the Northern Rock deal just damaging, dodgy, extra debt from a failed Prime Minister?

Gordon Brown: It is not bad judgment to take British business men and British business women— [Interruption.]

Mr. Speaker: Order. Let the Prime Minister answer.  [Interruption.] Order.

Gordon Brown: It is not bad judgment to take British business men and women to win orders for British exports in China and India. I have no apology to make for that. As for the right hon. Gentleman's policies, we get from him merely slogans, and no substance whatever. If I may say so, the record of this Government, as he will find when he goes to Davos this week, is acknowledged around the world. We have low inflation, low interest rates and high employment, and had the best growth of any industrialised country in the last year. We are determined to maintain the stability of the British economy; it would be put at risk under Conservative policies for instability. We are the party of stability, and will always remain so.

Andrew Smith: In contrast to what we have just heard from the Leader of the Opposition, given all the turbulence in global markets and the impact that that can have on people's everyday lives, is not the most important thing to continue with the Government's measures for economic stability, which have brought us low inflation, low interest rates and high employment? That is the best way of sustaining economic strength for the future.

Gordon Brown: Only yesterday, a former Chancellor of the Exchequer, while acknowledging the difficult conditions in the world economy and the problems of the last few days, said of Britain:
	"we have maintained a good level of growth last year. The level of employment in the country is quite good. Some of our businesses are extremely competitive. The level of earnings remains quite high."
	That is the record, acknowledged by a former Chancellor. Is it not about time that the shadow Chancellor and the Leader of the Opposition acknowledged that we are doing the right things by the British economy? In spite of their views, we will continue to do so.

Nicholas Clegg: May I associate myself with the expressions of condolence and sympathy for the friends and family of Corporal Darryl Gardiner?
	As we have heard, the Prime Minister this week unveiled his cunning plan to nationalise all the risks of Northern Rock, but to privatise the profits. How can he justify fleecing the taxpayer by handing a blank cheque to the private sector, when he knows, unlike the Conservatives, that temporary nationalisation is the right thing to do?

Gordon Brown: In the proposals that we put forward, we share in all the benefits as the Northern Rock company, or its successor company, does better. If he looks at the small print, the hon. Gentleman will see that we are protecting the interests of the taxpayer in the best way possible. Again, I am afraid that it is very difficult to listen to the Liberal party on economic policy. Yesterday he spent another £2 billion; a few weeks before that he said that he had £1 billion of extra spending commitments, but he could not justify them or explain how the money would be spent. None of his policies add up. Is it not time that he went back to the drawing board?

Nicholas Clegg: Is not the real truth that the Prime Minister will not nationalise the bank because he is running scared of the Conservative party?  [Interruption.] It has no solutions— [Interruption.]

Mr. Speaker: Order. Let the hon. Gentleman speak.

Nicholas Clegg: The Opposition have no solutions of their own. When will the Prime Minister stop listening to them and do what he knows to be right? Or will he continue to insist that British taxpayers pay through the nose for years to come because of his own lack of leadership?

Gordon Brown: May I just say it in this way: nationalisation is one of the options that is open to us, as the Chancellor has made clear—nationalisation, public ownership, but it would be on the road back to private ownership, as the Liberal Democrat shadow Chancellor has acknowledged. But we are right to look at every option. If commercial companies come to us and say that they have proposals to run Northern Rock in a better way in the interests of the shareholders and depositors than it is being run at present, we are right to look at those proposals. It would be a mistake for us to reject proposals coming from the private sector, as the hon. Gentleman seems to want to do. All options are on the table. We will do what is best by the shareholders and the depositors of Northern Rock, and we are determined at all times to maintain the stability of the economy. We have done that for four months after Northern Rock went into difficulties. We have maintained stability and the difficulties have not spread into other companies and other institutions. We are determined to continue to maintain stability, and all our decisions will be made on that basis.

Michael Connarty: May I ask the Prime Minister to focus on the plight of the working poor in this country? Is he aware that despite the clear intentions of the customers who leave tips to people in the hotel, restaurant and hospitality industry, the tips are not paid in addition to those people's minimum wage, but are paid as part of the minimum wage? That must be addressed. Will he agree to meet me and other MPs who have been campaigning on the issue, to discuss how his Government can at last end that shameful practice?

Gordon Brown: Of course I am happy to meet my hon. Friend and colleagues to talk about the future of the minimum wage. Where tips are paid directly to the employee, they go to the employee. Where they are paid through Visa or through a bill, that is a matter for the employer to negotiate with the employee. The great success of the minimum wage is that it has risen by 50 per cent. since 1999, faster than wages in the economy. The Conservative party said that the minimum wage would cost us 2 million jobs. We introduced the minimum wage, we have raised it by 50 per cent. and we have created more than 2 million jobs.

Kenneth Clarke: The Prime Minister has just quoted with approval the reasons that I gave yesterday why this year's sharp slowdown in the economy might yet not turn into a recession. I thank him for that. Does he also agree with my view that he handed on the public finances to his successor in a quite appalling mess, which means that fiscal policy cannot be used to help in the present situation, that his dithering and incompetence over Northern Rock have added very considerably to our existing indebtedness, and that the fiscal rules on which he used to rely when making his claims to economic stability are now quite incredible and have been shattered by his own policy?

Gordon Brown: I know that the right hon. and learned Gentleman is trying to rescue himself with his own party after his unguarded comments yesterday about the success of the British economy. As someone who inherited a very difficult economic situation from him in 1997, may I tell him that we have observed all our fiscal rules. We made the Bank of England independent against his advice. We have had 10 years of growth, which the Conservatives would never have had. He predicted a recession in 1997; there was no recession. We have maintained stability, which he would not have done.

David Clelland: The latest economic survey for the north-east shows high levels of business confidence, and there is no doubt that the region's economy has improved under the stewardship of my right hon. Friend, with massive reductions in unemployment and record levels of employment. Much remains to be done, however, to reduce the gap between the north-east and other regions. What does my right hon. Friend consider to be the greatest threat to continued progress—

Gordon Brown: rose—

David Clelland: —and will a slowdown—

Mr. Speaker: Order.

Gordon Brown: Long-term unemployment in the north has fallen by 70 per cent. Long-term youth unemployment has fallen by more than 70 per cent. More people are working in the north of England as a result of the Government's policies, and we are determined to maintain that. That success would be put at risk by opportunistic policies that risked the public services in favour of £10 billion of tax cuts and meant that we could not spend on health, education and the new deal in the interests of the people of the north. That is why I urge people to favour our policies against the policies of the Opposition.

Mark Harper: The Prime Minister was obviously able to answer that question, because it was one that he wrote earlier. Last week, the Government announced that Gloucestershire would be a pilot area for short breaks for disabled children. My Conservative colleagues on the council are already working with local parents to develop that. The Prime Minister will know that in the comprehensive spending review he promised that NHS spending would match that coming from the Department for Children, Schools and Families. Can he confirm that my local primary care trust will indeed get £3.6 million over the next three years to pay for those short breaks?

Gordon Brown: I can confirm that primary care trusts will get money to make it possible for there to be breaks for carers of children. I agree that we have to do more for disabled children, about whom we have had a review, and for the carers of disabled children. I had a seminar with many carers in Leeds only a few days ago. There is support for more action on respite care, more help for carers' pensions, more for the carer's allowance and more support for carers in all their different needs. We are determined to move that agenda forward, and I hope that there will be all-party support for that.

Tom Clarke: Given that reply, does my right hon. Friend agree that following the reviews conducted for this House on disabled children and their families, the £34 million allocated to Scotland should be spent on the relevant services, including the NHS—and those alone? That is happening in every other constituent part of the United Kingdom.

Gordon Brown: I am grateful to my right hon. Friend, who has taken a long-term interest in these matters and piloted through a major Bill for the protection of disabled people. The money allocated for disabled children and disabled people should go to disabled children and disabled people, and we will do everything in our power to make sure that, in every part of the United Kingdom, the needs of the disabled are properly recognised.

Greg Hands: With police investigations under way into four projects of the London Development Agency, and with millions of pounds of central Government money unaccounted for, will the Prime Minister join me, and colleagues from across the House, in calling for an independent investigation into corruption at the LDA and the role of Mayor Ken Livingstone?

Gordon Brown: That is a matter for the police. If we look at London, we see that jobs are up, police numbers are up, crime is down and transport is getting more investment. That is why we need a Labour Mayor.

David Crausby: Working people in my constituency are just as concerned about their employment prospects as those who come from abroad to work in the UK. Will my right hon. Friend protect both British and overseas workers by guaranteeing fair wages and conditions for all? In the absence of a European directive, will he ensure support for domestic legislation that protects agency workers?

Gordon Brown: My hon. Friend is absolutely right to raise the question of vulnerable workers in the United Kingdom—those who have come here to work or who were already in the United Kingdom. That is why we have created a forum to deal with many of those issues. As for the agency workers directive, we look forward to there being a European agreement on that. If there is not a European agreement, of course we will look at what we can do domestically to protect workers and ensure that they have the rights that they should have.

Elfyn Llwyd: In an age gone by, the Prime Minister might well have been a covenanter. Is he concerned about the current breach of the covenant with the military and about the breach, as we speak, of the covenant with the police services of England and Wales?

Gordon Brown: The Chief of the General Staff has said that there is not a breach. That is because we are spending more on defence than ever before. Over the course of the last year, we have made arrangements to give better allowances to those serving our country abroad. We are doing everything in our power to make sure that they are not only safe and well protected, but given the best allowances and accommodation. We will continue to do everything in our power to protect our military forces.
	As far as the police are concerned, there has been a 39 per cent. rise in police pay over the last 10 years. People understand that in the fight against inflation it was necessary to stage public sector pay awards. I would like to have given the police more. I would like to have given the nurses more, and more to other public sector workers who found that their wages were staged. But if pay rises are wiped out by ever-rising inflation, no benefit will go to the police or anybody else who receives those pay rises.
	I hope that over the course of the next year, we can move to a two or three-year pay agreement that will give stability and certainty to the police and other public sector workers. We believe that they do a great job. The important thing, however, is to recognise that in the fight against inflation it is necessary to take action at the right time. Others might not take that action. We did.

Phyllis Starkey: If Britain's economy is to continue to meet the challenge of global competitiveness, we need to continue to upskill workers. In that context, the recent announcement on ELQ—equivalent or lower qualification—funding is a welcome recognition that the concerns of the Open university and others have been listened to. What more are the Government doing to help mature students and women returners, in particular, to access higher education?

Gordon Brown: No one has fought harder for the Open university than my hon. Friend. I congratulate her, as the MP for Milton Keynes, on what she has achieved in fighting for that institution. We have just allocated £100 million to give grants to 20,000 people to get their first degree. She is absolutely right: there are 2.5 million people in this country who have a qualification level just below higher education, many of whom want a second chance to get a degree. We want to do more, particularly for women and mature students, to make that possible, and over the course of the next few years we will set out plans to make that happen.

Nicholas Winterton: I am asking this question as an honorary vice-president of the Royal College of Midwives. With the number of midwives and student midwives falling, with last year's cut in NHS resources for maternity services, and with the birth rate in this country dramatically rising, what urgent steps will the Government take to ensure that there is no deterioration in maternity services for pregnant women; and how will they honour the guarantees in their maternity strategy?

Gordon Brown: I share with the hon. Gentleman the desire to do more to help midwives and maternity services in this country. I thank him for his work as honorary vice-president of the Royal College of Midwives. The figures show that between 1997 and now there has been an increase of 2,084 midwives and a 20 per cent. increase in the number of students entering training for midwifery. We accept that we need to do more, and we will do more, with 1,000 more midwives in the years to come. I hope that that answers the hon. Gentleman's question. Britain remains one of the safest places in the world for children to be born, and we will ensure that we do everything in our power, with the Darzi report and the announcements that we will soon make, to ensure that that remains the case, and we will ensure that midwifery is properly financed.

Ann Clwyd: Would my right hon. Friend care to congratulate the miners of Tower colliery in my constituency, who over the past 13 years, after investing their own redundancy pay in a miners' co-operative, have been highly successful, despite the efforts of the Conservatives to shut them down?

Gordon Brown: I was pleased to visit Tower colliery and give support to the miners who had invested their own savings for all these years. We were able to support that colliery with operating and investment aid. I believe that some of the former miners will be able to continue their careers in deep mining, but the colliery is now exhausted. I want to thank them for their efforts, proving that working people can get together and make a success of a project that other parties said would never work, and to thank my right hon. Friend for her efforts in ensuring that Tower colliery was a great success during those years.

Steve Webb: The Department for Work and Pensions holds records on tens of thousands of women in their 60s who would be eligible to boost their basic state pension under a very complicated scheme that most of them have never heard of. Will the Prime Minister ensure that the DWP simply tells those women what they are entitled to?

Gordon Brown: We will do what we can to ensure that women in their 60s have proper pension rights. As the hon. Gentleman knows, this is one of the areas where over many decades we have not done enough to secure rights for elderly women. Under the Pensions Bill, more women will get the basic state pension and will not have to have a smaller pension, as before, but we will try to do our best to ensure that women in their 60s get pension rights as well.

Linda Gilroy: When the Prime Minister was in China recently, what talks did he have about co-operation in research and development in the science sector? Will he ensure that the UK marine science sector is as well resourced as possible so that it can make the most of its global reputation in partnerships with China and elsewhere?

Gordon Brown: In China, I was able to say that the marine centre in my hon. Friend's constituency has very strong links with that country. We will do what we can to sign more agreements with China on scientific co-operation. My hon. Friend understands that under this Government the science budget has doubled. Science has never been better financed. That would not have happened under the policies of the Opposition. We will continue to support the science and technology of Britain.

Richard Younger-Ross: When the Prime Minister was in China, did he receive assurances that British journalists could visit Tibet, which is currently occupied by China?

Gordon Brown: On my visit to China, I made it clear to the Chinese Government that we believed that journalists should not only be free to move within China, but free to interview people during the Olympic games. I hope that the offer that the Chinese authorities have made will be sustained after the Olympics, and I hope that international pressure will back up our efforts to ensure that journalists have the right of free movement.

Obesity

Alan Johnson: The first ever cross-government strategy to tackle obesity is being published today. The House last discussed this subject in October, when the then chief scientific adviser, Sir David King, and his foresight team published the report "Tackling Obesities: Future Choices"—the result of two years' work by some of our most eminent scientists and academics, seeking to determine how we can deliver a sustainable response to obesity over the next 40 years.
	I shall just remind the House of the challenges identified in that report. Foresight said that with 23 per cent. of men, 24 per cent. of women and 18 per cent. of children clinically obese, and with no expectation of any spontaneous reversal of obesity trends, those figures will rise to 60 per cent. of men, 50 per cent. of women and 25 per cent. of children by 2050. That will have a severe impact on the health of individuals, increasing the risk of diabetes, cancer, and heart and liver disease. The cost will be felt in every part of society, not just in headline financial or health terms, but in personal ways, by affecting the lives and opportunities of millions of people.
	The overall cost to society is forecast to reach £50 billion over the next 40 years based on current trends, including a sevenfold increase to the NHS. However, as foresight said, such outcomes are not inevitable, and if we take action now the trends can be reversed. Halting the obesity epidemic is primarily about individual behaviour and responsibility—how people choose to live their lives, what they eat and how much physical activity they take. It is also, as I shall outline, a matter of the commitment of the private and voluntary sectors. However, the Government have the most significant role in expanding people's opportunities to make the right choices for themselves and their families, in ensuring that people have clear and effective information about food, exercise and individual well-being, and in ensuring that policies in a wide range of areas promote an environment that supports people in their desire to maintain a healthy weight.
	The Government have set themselves a new ambition of being the first major country to reverse the rising tide of obesity in the population by ensuring that all individuals are able to maintain a healthy weight. Our initial focus is on children: by 2020, we intend to reduce the proportion of overweight and obese children to 2000 levels. To help to fulfil that ambition, foresight suggested that the Government should focus their action on five main policy areas. I should like to set out the initiatives that the Government are announcing today in each of the five policy areas. They will be financed with £372 million of extra funding between 2008 and 2011.
	The first initiative concerns the healthy growth and development of children. The strategy begins from the start of a child's life, with early identification of at-risk families, and plans to make breastfeeding the default option for mothers. For school-age children, as my right hon. Friend the Secretary of State for Children, Schools and Families, who has worked closely with me, set out yesterday, the Government will continue to invest in healthy schools, including making cooking a compulsory part of the national curriculum. We will also take measures to increase participation in physical activity by the least active children, and develop policies to ensure that the lunches that children bring to school are as healthy as those now provided as school meals. To support and empower parents to make changes to their children's diet and physical activity at all ages, we will invest £75 million in an integrated marketing campaign.
	The second strategy is promoting healthier food choices. It sets out a healthy food code of good practice, which we will develop in partnership with the food and drink industry and other relevant stakeholders. The code will challenge the industry to adopt voluntary practices to reduce consumption of saturated fat, salt and sugar. We will also ask Ofcom to bring forward its review of the restrictions on advertising unhealthy foods to children and report early findings by September. On the broader environment, we will promote the flexibilities already contained in planning regulations, so that local authorities can limit the spread of fast food outlets in specific areas, such as those close to schools or parks.
	The third policy is building physical activity into our lives. The initiatives range from those focused on the individual—for example, a Walking into Health campaign, which aims to get 30 per cent. of the population walking at least 1,000 more steps every day—to those directed at whole communities and businesses. For example, we will invest £30 million in Healthy Towns, which means working with selected towns and cities to learn from the successful EPODE model used in France through a whole-town approach to promoting physical activity.
	We will also set up a working group with the entertainment technology industry to incorporate devices that allow parents to manage the time that their children spend watching TV or playing sedentary games online much more widely. We will review our overall approach to physical activity, including the role of Sport England to ensure a clear legacy of increased physical activity up to and beyond the 2012 Olympic games.
	The fourth policy area is creating incentives for better health. Individuals, employers and the NHS need to have stronger incentives to prioritise the long-term work of improving health. In that strategy, we lay out plans for working with employers and employer organisations to explore the way in which companies can best promote good health among their staff and make healthy workplaces part of their core business model. We will pilot and evaluate a range of different approaches to using personal financial incentives to encourage healthy living.
	The fifth and final strand is personalised advice and support. When people are overweight or obese, they need access to personalised services that are tailored to their needs and support them in achieving real and sustained weight loss. We will support the commissioning of more weight management services by providing increased funding in the next three years. Our intention is that people have easy access to highly personalised feedback and advice on their diet, weight, physical activity and health, providing them with the information to encourage healthy behaviour. We will explore the potential to develop further the NHS Choices website so that it provides advice on diet and activity, with clear and consistent information on how to maintain a healthy weight.
	The measures in those five policy areas are only the first steps towards our objectives. We will continue to examine not only the best emerging evidence of what works, but whether everyone in society—employers, communities and individuals—can participate fully in the programme. Our research will be part of wider efforts to develop our knowledge through the newly established obesity observatory. We will publish an annual assessment of the progress being made and use that to develop and intensify our policy focus as we acquire evidence on what works best.
	Foresight pointed out that there was at that time no concerted strategy or policy model that adequately addressed the problem of obesity anywhere in the world. It added that the work assembled for the project gives the UK a platform from which to become a global leader in tackling a problem that is challenging policy makers across the world. The report has been produced with the full participation of the interim expert group of distinguished scientists and academics, which was created from the foresight project and contains many of the leading scientists and nutritionists who worked on it. The expert group will continue to guide us, placing science at the heart of our policy response, so that we are better able to grasp this opportunity to tackle the most profound public health risk that this country faces. I commend this statement to the House.

Stephen O'Brien: I thank the Secretary of State for supplying a copy of his statement during the past hour. I apologise for the absence of my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), who was already on a tour in the north of England when the Secretary of State said that he planned to make this statement.
	Reversing the trend of rising obesity is a social responsibility in which everyone has a role to play. The UK now has more obesity than anywhere in the Organisation for Economic Co-operation and Development except for Mexico and the US. England has a higher rate of obesity than anywhere else in the European Union, with a rate of 22.6 per cent. in the UK compared to 10 per cent. in France. Obesity could also cost £60 billion by 2050, on the Government's own forecast figures.
	With the rising tide of obesity, hospital treatments for the condition have spiralled on Labour's watch, across all age groups and both sexes, with grave inequalities increasing among socio-economic groups. Most alarmingly, obesity among children is sharply on the increase, rising from 10 to 17 per cent. among children aged between two and 10 in the decade to 2005, with 31 per cent. of children in that age range in England now either overweight or obese. We therefore agree that there is a public health crisis in obesity, which is something that we have been urging the Government to prioritise for years.
	The question is: how do we tackle it? Does the Secretary of State agree that we cannot leave the problem to doctors, thus recognising what Dr. Colin Guthrie has said:
	"The GP's role has changed so much over the past 10 years. We have so much else to do in our practices. We are swimming under targets to meet so many things"?
	Does the Secretary of State also recognise what Dr. David Haslam, the medical director of the National Obesity Forum, has said:
	"I am rewarded"—
	by the quality and outcomes framework—
	"for identifying an obese person. I then make a list, put it in a draw, close it and forget about it. It is good that obesity has made it into the GMS contract as a disease in its own right, but it is a catastrophic failure—a complete and utter waste of time—that it has done so in its present incarnation"?
	There is no question but that obesity is a crisis that needs tackling, but what needs to happen without more overweening, nanny state, maddening lifestyle diktats?
	We certainly agree that the Government have a duty to ensure that people have the information they need to make informed choices about the food they eat. The Government have so far failed in that duty, and the information is simply not available. At last we now have a commitment to cross-party working—again, something for which we have called for years. Indeed, my hon. Friend the Member for South Cambridgeshire wrote to the Secretary of State only yesterday, building on the many representations that he has made on the issue over the years.
	Does the Secretary of State agree that current food labelling practices are fragmented and confusing, with different manufacturers using different systems and some using none at all? The traffic light labelling system, which the Government advocated in 2004, added to that confusion because it is based on the concept of good or bad food, when what matters is whether a person's diet is good or bad. The system does not work in practice, either. If a wholemeal bread roll is low in sugar, moderate in fats and high in salt, would it merit a green, amber or red light? If fruit juices, cheese or fish have red traffic lights, how will people understand that they can form part of a healthy diet? How does a crude traffic light system deal with the major differences between the diets of adults and children?
	Since 2004, we have been calling for food labelling that is based on information about food's nutritional value and its contribution to a good diet. That means that people should be given information about the recommended daily amounts of calories, fats, sugar and salt. Such a system would be well understood by the public and would help people to put together a good diet. That is why for more than three years we have argued for a combined multiple traffic lights and guideline daily amounts system. In its food and health action plan in 2005, however, the Department of Health said that by early 2006 there would be
	"a clear, straightforward coding system that is in common use, and that busy people can understand at a glance, to find out which foods can make a positive contribution to a healthy diet".
	Does the Secretary of State accept, however, that little progress has been made?
	Does the Secretary of State also accept that we should jointly advocate the traffic light GDA front-of-pack labelling system, making Britain a leader in the European debate on the issue? The matter has been handed over completely to the European Parliament to dictate directives on food labelling. As the Secretary of State well knows, I, on two occasions, and two of my colleagues, have introduced private Members' Bills that would have given the Government the opportunity to pick up the issues of both country of origin labelling and standards of production. The question now is whether we can lead in that debate and ensure a common European position, given that the trade in foods requires standards that are recognised across Europe.
	In 2005, the Government promised that they would take simple steps to clarify food labelling. They have not delivered. The Food Standards Agency has been strongly pushing the traffic light model, which the Department of Health strongly supported. As the Secretary of State well knows, food labelling is only a matter of voluntary practice.
	The Secretary of State's statement is a series of repackaged announcements, which were in Labour's last obesity strategy but have not been delivered. Labour did not even attempt to tackle obesity until 2004, with its public health White Paper "Choosing Health: Making Healthy Choices Easier". A comparison between the 2005 report setting out delivery dates for the commitments in that White Paper, and today's strategy, shows that little progress has been made.
	What of cooking in schools? Who could object to increased teaching of cooking in schools? We do not. But at what point does the curriculum allow teachers the discretion to balance cooking with enough physical education and sport? It is not the fault of teachers, but sport has been squeezed out by an emphasis on the core curriculum, obsessive health and safety rules and a mass sell-off of playing fields under this Government, especially in the late 1990s.
	On the issue of junk food—

Mr. Speaker: Order. The hon. Gentleman has gone over the time allocated to the Opposition. In fact, I have given him a minute over. Rather than being overweight, he is over time.  [Interruption.] I am watching the clock as well. Back Benchers must get a chance to speak.

Alan Johnson: The hon. Gentleman can be described as Confused of Eddisbury, because on the one hand we are castigated for introducing an overweening nanny state, while on the other we are told that we have not taken enough action in this regard. I listened to him saying that we have made a commitment to cross-government working on the issue. I have looked through the document carefully, and I find that I have made no such commitment. Given the response from Conservative Members, I think that it would be a bit futile.
	Let us deal with the questions raised. The constructive part of the hon. Gentleman's speech was his recognition that the issue is a real public health threat, and his acceptance that everyone has a role to play. That was absolutely right. As for the reference to GPs, this country now has 18 per cent. more than it had in 1997, and it will have yet more—we are creating 250 GP-led health centres across the country. When I talk to GPs, they do not tell me that they have to be incentivised to deal with someone who is overweight. Given that an overweight person who loses half a stone becomes half as likely to develop type 2 diabetes, GPs need no incentivising. I also remind Conservative Members that GPs now spend on average 10 minutes more with every patient than they did in 2000, so there is more time being devoted to this issue at primary care level.
	The hon. Gentleman spent a large part of his contribution talking about food labelling, which is one aspect of a very wide-ranging debate. Let me pick up on the points that he raised. Yes, we have championed the traffic light system, and we have done so because consumers regularly tell the FSA that that is the system they prefer. It is clear, it requires no translation, and it is very accessible. However, we say in the report that we would like to move to a single system.
	Incidentally, we are leading the world in that our food retailers and manufacturers have, to a large degree, accepted the need to put information on packets. We should congratulate them on that. The problem is that there are three different methods, and I think that we would all like a uniform system. Our view is that the expert independent group that we set up should look at the three systems and at all the evidence, and make a recommendation on which system we should adopt, whether it be the traffic lights, the monochrome system or the hybrid system. When we get that recommendation, we will work with the industry to try to establish a single system. That is the most constructive way forward.
	The hon. Gentleman said that this strategy was a repackaging of old initiatives, and that there was nothing new in it. Let me remind Opposition Members that we are putting more than £100 million into cycling—

Ben Bradshaw: Hear, hear!

Alan Johnson: To the huge admiration of my hon. Friend the Minister. Cycling England has received about £14 million, and it is now going to receive something like £120 million, which will do an enormous amount to increase cycling levels.
	Cooking has never been a compulsory part of the national curriculum at key stage 3. For the very first time, in this strategy we are announcing that it will become compulsory, and we are recruiting 800 extra teachers to ensure that it is properly taught. That is an enormous step forward. I also want to mention Healthy Towns. When we debated the foresight report, the hon. Member for South Cambridgeshire (Mr. Lansley) rightly looked at what was happening in France and Finland to see whether we could reproduce the kind of model that exists in those countries. The Thames Gateway presents a perfect opportunity for us to do that, by taking a whole-town approach. Such approaches have had startling results in France, using the EPODE model. That is just one of many new, fully funded initiatives in this proposal.
	I want to make a final point to the hon. Gentleman about school sports and the myth about playing fields being closed. Playing fields closed under the previous Conservative Government. To close a playing field now, a school has to get the authority of the Secretary of State and prove that it will put the money back into new resources for sports and physical activity. Twenty-two per cent. of children in this country were doing four hours of high-quality sport and physical activity each week when we first measured it after coming into government; now, the figure is 86 per cent. We have a good record on this, and if we are going to take a cross-government approach to tackling this issue, I would ask for a less miserablist approach from those on the Conservative Front Bench.

Howard Stoate: I congratulate my right hon. Friend on this very constructive set of proposals. Experience shows that, provided we take the public along with us at a speed they are happy with, we shall make much better progress, especially in areas such as smoking and environmental issues, where the public can be educated in order to improve the situation for the future.
	May I ask the Secretary of State to concentrate on two issues? One is that we need yet tougher regulations on advertising to children foods that are high in fat, salt and sugar. I still believe that that is a major part of the problem. Secondly, will he see what he can do to help GPs to help people with weight problems by making more interventionist strategies available? At the moment, GPs can monitor people's weight but there are not enough interventions available to them to help people to manage their weight and obesity problems.

Alan Johnson: My hon. Friend is right to raise those two issues. This month, we have introduced the first restrictions on advertising to children. Ofcom said that it would review the situation after a year, but it has now agreed, as part of this strategy, to use just six months' information. We therefore have the prospect of having an evidence base for whether to move further by September. This is a delicate issue, and there are different views on all sides, but I think that that is the right way to proceed.
	My hon. Friend asked about GPs. This is more than an obesity strategy; it is a public health strategy. The body set up to tackle obesity is very much a cross-government public health body. All the issues involved—from breastfeeding through to taking more exercise and having a healthy diet—apply right across the public health spectrum. We therefore need more interventions, and GPs need more resources for that. That is why we have announced £372 million over the next three years as part of this package.

Norman Lamb: I thank the Secretary of State for giving me early sight of his statement. Last time we discussed this subject, I challenged him to join me in taking part in the 10 km London run. He has not come back to me on that yet. Perhaps the enthusiasm of the Minister of State, Department of Health, the hon. Member for Exeter (Mr. Bradshaw), for physical exercise in the form of cycling suggests that he might be more up for it. However, I am still waiting to hear from the Secretary of State and, indeed, from the Conservative spokesman.
	We all agree about the scale of this problem. It is growing at a much faster rate than anyone anticipated, and this country has the worst rates of obesity anywhere in Europe. By 2010, there will be 1 million obese children, which is a pretty frightening statistic, and we are now seeing the onset of type 2 diabetes among children, which had previously not been the case. We must also consider the knock-on health consequences—including heart and liver disease, as well as the mental health problems and low self-esteem that go with obesity—as well as the cost to the NHS and the economy.
	I welcome the statement's commitment to placing science and evidence at the heart of policy making in this area. It is always welcome when the Government are prepared to change the habits of a lifetime by moving away from gimmicky, headline-driven policy making to policy making that is based on science. I also welcome the focus on physical activity.
	Is it not the case, however, that the Government are their own worst enemy? Their record so far has clearly been woeful. Of course it is absurd to suggest that they are responsible for all of these problems, but they over-promise and under-deliver. The 2004 White Paper made a grand spending commitment, but the Faculty of Public Health Medicine said today that only half the money that was promised has been put forward. Why should we believe the spending commitment that has been made today, when that previous commitment has not been met? Furthermore, the target of eradicating childhood obesity by 2010 has been quietly dropped in favour of a much vaguer commitment to achieving a target by 2020.
	The main issue that I want to raise is the fact that the statement says absolutely nothing about growing health inequalities. That is more relevant in the area of obesity than in any other, and there is clear evidence of a growing divide in regard to weight. The foresight report was clear in raising that concern. Will resources be targeted at those disadvantaged groups in which the problem is the greatest? Low levels of breastfeeding are particularly prevalent in disadvantaged groups. Will resources be targeted at that problem as well, as there is a clear link with obesity?
	The statement makes reference to tackling fast food premises, which hit the headlines over the weekend. What is the substance behind that proposal? The statement also talks a lot about the efforts to be made in schools, but the fact is that, since the Government's introduction of the healthy eating strategy, 425,000 fewer children are eating school meals. What are the Government doing to address that concern and to encourage more children to eat school meals? The statement then lurched into nanny state mode, when it proposed to
	"develop policies to ensure that the lunches children bring to school are as healthy as those now provided as school meals."
	How on earth are we going to do that? Will it involve the introduction of the lunch box police? How on earth can we dictate to people in that way?
	The food industry clearly has a big part to play in all this, and it would be sensible to arrive at one system for food labelling. Will the Secretary of State assure the House that such a decision will be based on evidence? Different systems are being considered at the moment; will the decision be based on evidence—

Mr. Speaker: To be fair, I must interrupt the hon. Gentleman.

Alan Johnson: That was a bit confused as well. The hon. Gentleman is trying to have it all ways. On his first point, I am tempted to say that my comments on whether I enter the cycling marathon will be delivered through a spokes person—

Norman Lamb: It is a run, not a cycling marathon.

Alan Johnson: Yes, but that would not have made such a good joke.
	At least we are agreed on the scale. I noticed that the Liberal Democrats very quietly dropped their commitment to free adult social care yesterday. If we had put resources into that, we would not have had enough money to invest properly in public health.
	I welcome the hon. Gentleman's commitment to using the relevant science. Let me mention Professor Susan Jebb from Cambridge university, who played an exceptional role in the foresight review and is now the chair of our expert group. She has looked at all these proposals in great depth and approved them.
	Let me deal with the more negative aspects—for example, the hon. Gentleman's comment that the Government's record was "woeful". We can always have a knockabout and say that we have not done all that we should have done. I accept that, but woeful? Let me just clarify on school sport that when I mentioned four hours, I meant to say two hours of high-quality PE in schools— [Interruption.] Well, the record has been put straight. Back in 2002, the first time it was measured, the figure for such provision was 22 per cent., but it is now at 86 per cent.—a massive increase, well ahead of our target.
	For the first time ever, we have introduced restrictions on advertising to children. I accept that some would have liked us to go further, but this is the first time that it has been done. We have introduced front-of-pack labelling. Yes, there is confusion about the different systems, but we are far ahead of the rest of Europe in that respect. Furthermore, an enormous revolution has taken place in school food. As my hon. Friend the Member for Dartford (Dr. Stoate) said a few moments ago, we need to take the public with us. Pictures of parents putting fish and chips through school gates are depressing, but we are moving forward on all those fronts.
	The hon. Member for North Norfolk (Norman Lamb) asks what we are doing to encourage take-up of healthy school meals, so let me remind him that Hull had three healthy school meal projects being run under a Labour administration; the incoming Liberal Democrat council cancelled them, setting us back in tackling obesity—yet here we have Liberal Democrat Members demanding to know what more we are doing to counter obesity.
	The hon. Gentleman is also wrong to say that we have a more lax public service agreement target. In fact, we have a tighter target because instead of simply seeking to halt the increase, we want to reverse the trend in child obesity—a much more difficult task—by 2020.
	The hon. Gentleman asked two further questions. On fast food outlets, there are restrictions, but there is flexibility in the current planning rules. We do not want to introduce unnecessary rules; we need to use existing regulations to allow local authorities to stem the increase in those outlets near schools and parks. As for lunch boxes, my right hon. Friend the Secretary of State for Children, Schools and Families is not suggesting that we need lunch box police. What we are talking about are the sorts of ideas that we saw working in the Green Dragon school in Brentford today. The head teacher and other teaching staff take responsibility for looking in a child's lunch box—it is much easier in a primary than in a secondary school—and if they find that the child has just a bag of crisps and a chocolate bar, they send a message back home. Some schools actually use a traffic light system, putting on a red, green or amber sticker to send an appropriate message to parents.
	The hon. Gentleman's final point was about health inequalities—a crucial issue. Obesity is a health inequality issue, as well as a public health and prevention issue, so the most intense activity should be focused on the poorest areas. We announced a £72 million investment in a public information system that we will want to use throughout the country, but it will be targeted where the problems are the most serious. I accept that obesity is a health inequality issue, and I believe that we need to use this strategy to tackle the broader health inequality problems we face.

Charlotte Atkins: I very much welcome my right hon. Friend's positive statement, particularly his encouragement of breastfeeding and compulsory cooking lessons. How would he build on the very successful GP exercise on prescription programme, particularly its extension to younger patients? Also, how does he intend to build on the successful school cycling initiatives, which have done very well in some parts of the country but have not been taken up as enthusiastically as I would like in other parts?

Alan Johnson: My hon. Friend has hit on two really important aspects of the problem. Exercise on prescription is being looked into further as we speak; it is a very important part of our plans to encourage more exercise. On school cycling, we have a very good relationship with the Department for Children, Schools and Families and the Department for Transport and have sought to increase the number of children participating through Bikeability. Some of the extra resources we are putting in will be invested in that.

David Curry: It is obviously sensible to try to bring together the different systems of nutritional labelling and I am sure that the Secretary of State would accept that, in view of the food trade, it makes sense to attempt to achieve that on a Europe-wide basis. Does he also accept, however, that if we want to guide people's choice and help them to make informed decisions about what to eat, they need to know about the nutritional qualities of food as well as about its drawbacks? Should we not move towards a system of information that is about more than just deterrence, as that could make a contribution to people sustaining a healthy diet?

Alan Johnson: The right hon. Gentleman makes two important points, the first of which is the significance of European competency, which was, incidentally, given by the Conservative Government, who I believe took the right decision. Nestlé, for example, is based in Switzerland and distributes its goods across the world, not just in Europe, so we need an international approach to the issue. I would try to convince the Commission that we should have a derogation to do our own thing in this country rather than be held back by the slowest countries in the European Union—but that is a debate for another day.
	The right hon. Gentleman's other important point was about deterrence and how to secure the best system. I believe that we should be looking into not only how a system of food labelling gives information to consumers, but how it encourages changed habits, so we need to highlight healthy food options. When items are labelled red under a traffic light system, it is not saying that people should never eat them, but that they should take into account the fact that if they are to maintain a balanced diet, they should not eat items such as chips every day. I am sure that a system can be devised that the food industry will buy into and that will take account of the right hon. Gentleman's very important points.

Ian Cawsey: My right hon. Friend's statement was welcome, but does he agree that one thing that the Government can do to fight obesity, particularly in children, is to provide modern and inspiring sports facilities? Will he work with colleagues across Government to ensure that that happens so that an excellent school—albeit one that is some way down the list in Building Schools for the Future—such as Sir John Nelthorpe school in Brigg, that has no sports hall now, could gain funding for one? Government-inspired renaissance projects such as the one in Goole, which has an excellent sports village concept, could also gain funding. May I assure my right hon. Friend that should he be able to help with the Goole project—

Mr. Speaker: Order. There are quite a few supplementary questions there.

Alan Johnson: My hon. Friend is an expert in covert lobbying for schools in his constituency. I know from my experience in education and the work carried on by my right hon. Friend the Secretary of State for Children, Schools and Families that the school sport partnership is one of the Government's great success stories. Although Building Schools for the Future is an important element in replenishing all school facilities, including sports, it is not as if there is inactivity in the meantime. The school sport partnership is already an important part of what has happened and will be an important part of what happens in the future. On the matter of the school in my hon. Friend's constituency, my right hon. Friend the Secretary of State for Children, Schools and Families suggests that my hon. Friend meet the Minister for Schools and Learners.

David Tredinnick: Does the right hon. Gentleman agree that it is a sad reflection on this Government that one of their key objectives is to get the number of obese children by 2020 back to 2000 levels, yet they have been in power for 10 years and the problem has got progressively worse during this Labour Administration? Notwithstanding the importance of food inputs, is it not a fact that getting people to exercise every day is the most important issue? What is the Secretary of State doing to ensure that schools provide compulsory physical training and that people are made aware of the different exercise options—the relative merits of cycling, walking 5,000 steps and running, for example? What is he doing to introduce advertising—

Mr. Speaker: Order.

Alan Johnson: Obesity, as foresight pointed out, has trebled over 30 years. I am perfectly willing, representing the party of Government, to take whatever responsibility we have in that matter. However, as the hon. Gentleman seems to recognise, there is a much wider responsibility in society. In his final comments, he came close to expressing the overweening nanny state argument.
	We have made huge advances in the provision of high-quality sport and physical exercise. There will be two hours a week in 100 per cent. of schools by 2010, and we will then progress to five hours a week.

Nigel Griffiths: As one who, 15 years ago, presented a Bill to introduce a harmonised system of nutritional labelling using the traffic light system, I warmly welcome my right hon. Friend's statement and the drive towards a single scheme. I am afraid my Bill received no support from the Government of the day, but it is good that it has received support from our Government. May I urge my right hon. Friend to ensure that he puts the health of our children above the health of the advertising industry?

Alan Johnson: Yes, we will put the health of our children before the interests of any group that is acting in a way contrary to the health of our children, but the advertising industry has worked with us to introduce the system that Ofcom implemented this year. It is the first time that we have had any legislation at all. If we are to move further, we would like to do so with the full commitment and continued co-operation of the advertising industry, although obviously the health of our children comes first.

Gregory Campbell: Does the Minister accept that in recent days, for good or ill, we have developed a celebrity culture, particularly among the youth of the nation? Would it not be appropriate for those in the public eye who have a particularly healthy and good lifestyle to offer their support, so that young people can look up to them as role models and take the exercise that they need?

Alan Johnson: We are considering using as role models people who had serious obesity problems when they were very young. At the weekend, there was a story in the papers about a male model who has shed about 10 stone and now appears in the kind of magazines that interest youngsters. The hon. Gentleman is absolutely right: we need such role models—including many Labour Members, I might add—as part of a national campaign to get the message home to young people.

David Chaytor: I welcome my right hon. Friend's statement, but will he think again about the possibility of providing more space in the national curriculum? The progress made in providing two hours of sport a week is significant, but two hours in a whole week is not a huge amount. Should we not give sport the same status that we give to maths, English and science? Should schools not be assessed on achievements in running, swimming and cycling in exactly the same way as they are assessed on achievements at level 4 in key stage 2, or the gaining of five A-C grades at GCSE?

Alan Johnson: This is an important issue, but I remind my hon. Friend that we will progress from two hours in every school to four hours and then five. Furthermore, every school will be an extended school by 2010. That will provide huge opportunities for extra-curricular activities, not just in dance and drama but in sport.
	I entirely agree with my hon. Friend about cycling. The extra money for Bikeablity will enable it to help us in a number of ways, as it has wished to do for many years, and I am sure that its contribution will be enormous.

George Young: Does the Secretary of State recognise that the Treasury is a key ally in his Department's campaign to improve the nation's health through, for example, the taxation of alcohol and tobacco? In the context of his statement about obesity, will he contact his colleagues in the Treasury and find out why those who join fitness centres in order to reduce their weight must now pay VAT on their membership fees?

Alan Johnson: I am sure that the Treasury will be aware of points made by Members throughout the House about how we can use the taxation system in our drive to tackle obesity. The Budget traditionally deals with that, and I think that the example given to the rest of us by the right hon. Gentleman—a distinguished cyclist in the House—will be taken into account when it is presented in a few weeks' time.

Barbara Keeley: I welcome my right hon. Friend's statement. Will he join me in commending head teachers such as Anthony Edkins of Harrop Fold school in my constituency? He has focused on the three issues of obesity, under-age drinking and teenage pregnancy among his pupils. As part of the focus on obesity, he has brought in a celebrity chef to teach young people about food values and to make the subject enjoyable. Is that not a great example?

Alan Johnson: I agree, and there are other great examples throughout the country. We have picked up some of that best practice. Only this morning I was with young Lizzy Butler, a 14-year-old from Leeds. In her school, the Watch It campaign has been remarkably sensitive in dealing with youngsters who have Lizzy's problem of being overweight, and changing their lives completely. That initiative was launched jointly by the NHS and the school, and we can spread it much more widely with the resources that we are investing in the programme.

Alistair Burt: I commend the expansion of cycling through a very successful network in Bedfordshire. May I also draw the Secretary of State's attention to the work of the Kids' Cookery School, a charity based in west London which for some years has been working with children from a variety of backgrounds to introduce them to cooking and eating healthy food? Will he assure me that the work of charities of that sort will be made available across Government, so that their expertise and success in bringing good food to the notice of children will not be lost in what might otherwise be a top-down state-run scheme?

Alan Johnson: I will give the hon. Gentleman that assurance. The Minister of State responsible for public health, my right hon. Friend the Member for Bristol, South (Dawn Primarolo), visited the Kids' Cookery School recently, and tells me that the Department learnt an awful lot from what is happening there. Indeed, organisations across large swathes of the voluntary sector are crucial allies in our strategy.

Michael Jabez Foster: I welcome the statement, but may I pursue the point about taxation? Given that incentives will be needed to get couch potatoes to the gym, is there not a case for tax relief on gym membership?

Alan Johnson: If I may, I will leave such questions to the Treasury. We have a Budget coming up. Representations can be made and questions can be asked of Treasury Ministers, and I am sure that my hon. Friend is as adept as any on these Benches at putting his view across.

John Whittingdale: Does the Secretary of State agree that healthy minds are as important as healthy bodies, and that access to high-quality United Kingdom-produced children's programmes contributes to that? Will he bear in mind the damaging impact that restrictions on advertising have already had on the UK children's programming sector, and will he resist any moves to extend the advertising ban further? That would do little to tackle obesity, and would do more damage to an important part of the broadcasting landscape.

Alan Johnson: What we have there is the balance of the argument. The covert point made by my hon. Friend the Member for Edinburgh, South (Nigel Griffiths), who has now left the Chamber, is that whatever the effect on the advertising industry, we should plough on regardless in the interests of children's health. Now, the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) has made a point about the effect on the industry. We do not believe that there is currently any proof of such dire effects, but we must listen to the industry. We do not want there to be fewer high-quality children's programmes because we have taken certain measures. In that event, children might watch programmes made overseas and tune into channels on which there are no restrictions.
	I understand the argument entirely, and so does my right hon. Friend the Secretary of State for Culture, Media and Sport. He is part of the ministerial team examining the issue, and will remain part of it. The voice of the DCMS will be an essential element of where we go next, after we have had the review in the summer.

David Kidney: I warmly welcome the determination to increase the promotion of breastfeeding. Evidence is becoming stronger all the time that babies who are breastfed are not just healthier, but protected from harmful weight gain in childhood and from obesity in later life. Is my right hon. Friend aware of the work of the Breastfeeding Manifesto Coalition, and will he consider implementing the seven points in the manifesto, which are consistent with his strategy?

Alan Johnson: As my right hon. Friend the Minister responsible for public health mentioned at a meeting last week, we are considering that seven-point manifesto. There is no difference between us on the importance of encouraging breastfeeding. We introduced the 26-week period of maternity leave so that we could be consistent with the World Health Organisation's drive in favour of six months of breastfeeding. Whatever we decide in relation to the manifesto, the coalition is crucial in helping us to implement the strategy. Breastfeeding is an essential part of beginning the process of good, healthy nutrition and tackling the problems of obesity.

Hugh Robertson: The Secretary of State's third action point was to build physical activity into our lives, and I entirely endorse that; it is one of the crucial planks of the strategy. Why then did the Minister for Schools and Learners confirm in a written answer that this Government are cutting the number of places for physical education teachers from 1,450 in 2005-06 to 1,180 in 2007-08—a cut of 25 per cent. in the very people needed to tackle the problem?

Alan Johnson: If the hon. Gentleman will forgive me, let me say that he can ask that question when he has the relevant Secretary of State in front of him. My recollection from when I was doing that job is that we had a large increase in the number of PE teachers.  [Interruption.] Well, I would have to look at that in detail. I will not take it as read from the hon. Gentleman.  [Interruption.] I mean no disrespect to the hon. Gentleman— [Interruption.]

Mr. Speaker: Order. Let the Secretary of State reply. The hon. Gentleman might not be satisfied with the reply, but it is the reply he is going to get.

Alan Johnson: My recollection is that we had increased the number of PE teachers and people dealing with sports in our schools, although I do no know whether they come under the heading of "PE teacher". The situation might be similar to that in public health, where we have a huge increase in the number of people dealing with that but they are not categorised in our staff census in the same way as they were before. I think that the hon. Gentleman might be usefully be present for Department for Children, Schools and Families questions.

Andy Reed: I welcome the statement, especially as there is currently a debate about the role of Sport England, and therefore probably about the role of primary care trusts and others working with the county sports partnerships. In view of the fact that there is a tight timeline for that—it is expected to have a broad strategy very soon and to have its business plan in place by April—can the Secretary of State give an assurance that the policy review he mentioned in his statement will be implemented in parallel with it rather than at a later stage, especially as the National Institute for Health and Clinical Excellence recognises that physical activity is one of the most cost-effective ways of tackling the obesity problem?

Alan Johnson: We will try to do it in parallel, but there is some work to do. The basic discussion we are having is about whether Sport England should focus on sport alone. We could use its network and, importantly, its reach into local communities to focus on activity that might not be sport-related, such as more walking and healthier lifestyles. There is a lengthy debate to be had and many issues for us to address, such as finance. If we can go through that process in time to introduce the policies in parallel, it would obviously make sense to do so.

Robert Goodwill: We have already heard how, sadly, the Jamie Oliver revolution has resulted in an exodus from school dinner tables, as children either bring in unhealthy pack-ups or leave the school premises to buy their favourite food: chips. In an effort to reverse this trend, will the Secretary of State discuss with Ministers responsible for school menus whether the status of oven chips in school meals should be reviewed? Although Scarborough's most famous product qualifies for three green traffic lights and is less than 5 per cent. fat, it is lumped into the same category as the unhealthy deep-fried alternative, which is why it is not served up more regularly in school meals.

Alan Johnson: It is chips with everything in this debate. That is a matter for the School Food Trust to look at. On the point about declining numbers, that always happens: in such circumstances, there is always an initial decline in the number of children eating school dinners. The SFT believes that although schools must pay more attention to whether their menus are attractive, the figures will gradually increase and things will eventually improve. That is certainly our experience in Hull, where we introduced the policy on school meals pre-Jamie Oliver. There should not be a counsel of despair because of the initial reaction of some children and some parents. If we keep at it, we can turn things around. I was at Green Dragon primary school in Brentford this morning. One big issue is that primary school children are much more receptive to these messages, and we need to ensure that the good habits continue when they go on to secondary school.

Tony Baldry: Those of us who are overweight already get enough stick at home without having to come to work for another beating. What we need are some carrots and some incentives. If the Secretary of State will give an undertaking to come to Banbury to listen to concerns about the future of local NHS services, I will give an undertaking to lose a couple of stone by Easter.

Alan Johnson: The hon. Gentleman draws attention to the importance of carrots in this policy. The five-a-day campaign is important. He has started with carrots; there are another four to go. I am sure we will see a svelte Member for Banbury very soon.

Julian Lewis: I sympathise with my hon. Friend the Member for Banbury (Tony Baldry), because the last time I dared to mention having lost a stone and a half, I was taken to task by one of the more delectable parliamentary sketchwriters, who disputed that at great length in her column. Having said that, I am a little puzzled by the idea of inspecting children's lunch boxes to remove forbidden fruits—or, rather, forbidden chocolates. Given that children, for good reasons, now have more disposable income than 30 years ago, how will that solve the problem of them simply going out afterwards and buying whatever unsuitable food they wish to purchase?

Alan Johnson: I am afraid that that suggests that if we cannot do everything, we should do nothing. Schools across the country are already doing what we seek to do on school lunch boxes: work with parents to ensure that they have information and advice. The hon. Gentleman will have seen what children in his constituency have in their lunch boxes. Some of them come to school, probably having had no breakfast, with only a packet of Hula Hoops and a chocolate bar in their lunch box. Irrespective of what they might eat outside the school, our responsibility is what happens inside the school. Having put, with all-party support, a lot of effort into getting school meals right, we should use—without introducing the lunch box police or being heavy-handed—the initiatives that teachers themselves are introducing and spread best practice. At all stages, we should work with parents rather than against them.

Points of Order

David Curry: On a point of order, Mr. Speaker. Next week, we begin our consideration of the treaty of Lisbon. Some Members are strongly in favour, others are passionately hostile and the majority may well descend into a narcoleptic trance. Whatever our attitude, however, we need to know what we will debate on Tuesday. At present, no programme motion has been tabled. We do not know what is going to be debated and we cannot table amendments. Will you reprimand the Government, Mr. Speaker, for yet again being so blatantly disregardful of this House, and ask if we can have that information so that, whatever our attitude, at least we have something to debate?

Douglas Hogg: Further to that point of order, Mr. Speaker. May I reinforce what my right hon. Friend has said, but not only from the perspective of Members of Parliament? It is important that outside interest groups know what we are debating on particular days, so that they can make representations to Members. At present, both Members and outside interest groups are entirely unaware of the programme.

Greg Knight: Further to that point of order, Mr. Speaker. I endorse what my right hon. Friend and my right hon. and learned Friend have said—that the fact that the Government have not tabled this programme motion is leaving perilously little time to table amendments that could be selected. In fact, the situation is worse than that: I understand that the Parliamentary Secretary to the Treasury has distributed to the Labour party a schedule of what he proposes for the debate, and yet Opposition Members have not had the opportunity to have that information.

Mr. Speaker: Let me say in reply to the points that have been made that, as I understand it, the situation is that there is to be a full debate on Monday on how we proceed in this matter. I do not know if that is of any help, and of course I am not a Government manager, but that is my understanding. Tomorrow, there is business questions and if Members catch my eye they are entitled to raise this matter with the Leader of the House.

Bob Spink: rose—

Mr. Speaker: The hon. Gentleman should let me finish. The Government will have heard the concerns Members have expressed through this point of order. I hope that this is of assistance to them. Members will understand that I have certain limitations in these matters, but these concerns will be heard.

Bob Spink: On a point of order, Mr. Speaker. I apologise for interrupting earlier; I thought that you had finished speaking. On Monday, at 11.45 am, the Government placed Command Papers 3710 and 3711 in the Vote Office for Members. Those Command Papers were central to the debate that started that afternoon and they were 356 pages long, so Members could not properly address that Second Reading debate. Will you, through your normal offices, make the Government aware that whatever we are going to debate on Tuesday and Wednesday next week, we need to receive the relevant papers and information in good time, so that we can have a meaningful and informed debate?

Mr. Speaker: The point was well made by the hon. Gentleman that all relevant papers should be available for hon. Members before any debate in this House starts, and I am sure that it will also be taken up.

Christmas Savings Schemes (Regulation)

Anne Snelgrove: I beg to move,
	That leave be given to bring in a Bill to make provision for the regulation of Christmas savings schemes; and for connected purposes.
	I am introducing this Bill as a result of the Farepak collapse, which in 2006 wiped out the Christmas savings of at least 122,000 small savers in this country. I am pressing for light-touch regulation for similar schemes, so that in future all savers' money is protected by law. Currently, the only bodies that do not regard as savers those who use Christmas savings schemes are this House, the Government and the financial services regulators in this country. In contrast, the people who offer the schemes market them as saving for Christmas, and crucially, the people who put their money in them regard themselves as savers just as much as those who save with building societies such as Northern Rock do. It flies in the face of social justice that this House should protect one set of savers and not the other.
	In my first Adjournment debate, on 7 November 2006, I set out three complementary principles for the future of former Farepak savers. The first was to work for immediate relief for the savers. The second was to secure an explanation and justice for the savers. The third was to get better regulation of the voucher industry.
	My right hon. Friend the Member for Makerfield (Mr. McCartney) introduced a voluntary regulation scheme, and it is to his credit that that was in place to protect savers for Christmas 2007. However, as memory fades and we move further away from the Farepak collapse—already 18 months have passed—the likelihood increases of new schemes that decline to join the voluntary scheme, or of existing schemes withdrawing from it. It is therefore the right time to move forward with proper long-term regulation, and I am very grateful for being granted the opportunity to present this ten-minute Bill.
	At the time of the crisis, my right hon. Friend the Member for Makerfield, in his role as a Minister at the then Department of Trade and Industry, set up a charity fund that paid £6.8 million to savers at the national level. I was very pleased to be able to co-ordinate action to help savers in my constituency at the community level; many hon. Members on both sides of the House did the same in their areas. People in Swindon will always remember the success of that collective action as a reminder of how people get together when the going gets tough.
	However, all our constituents are still waiting to receive the small amount of money left in Farepak after the collapse. I again urge the liquidator to hasten her work to bring a conclusion to this phase of the collapse and to bring closure for those affected. A gap of £29 million that has been lost to the Farepak savers remains. We know how Farepak savers were affected because of the excellent Unison-sponsored report that I helped to launch in the House last November. It found the following: women, particularly those on low incomes, were disproportionately affected by the Farepak collapse; Farepak customers were being 'prudent savers', using Farepak as a way of managing their low household incomes; and the victims of Farepak want justice, demanding adequate compensation for their plight and enhanced regulation, and demanding that those responsible be held accountable for the harms that have been committed.
	Shortly after that launch, my hon. Friends the Members for North Ayrshire and Arran (Ms Clark), for Workington (Tony Cunningham), for Livingston (Mr. Devine) and for Bridgend (Mrs. Moon) joined me for a meeting with our right hon. Friend the Prime Minister, who undertook to examine the regulatory framework for the prepayment industry to see whether anything more could be done to give Christmas club savers protection in future. He gave a commitment to come back to us on all the issues we raised on behalf of those affected by Farepak, and we look forward to hearing from him.
	Christmas 2007 could have been a tragedy for two other groups of people, because Northern Rock ran into trouble in September last year—we all know the outcome for thousands of investors, savers and employees—and Travelscope, the tourism company, went into administration just before Christmas, affecting 40,000 holidays and putting 250 jobs at risk. The Government have rightly acted swiftly to protect Northern Rock savers and investors. Travelscope customers' money was already protected by the arrangements in place to cover what happens when airline companies or tour operators go bust. The air travel organiser's licence model is based on primary bonds provided by banks and insurance companies, backed up by a common fund, the air travel trust fund, managed by the Civil Aviation Authority. All those people were safe, unlike the Farepak savers.
	I am proposing that the Civil Aviation (Air Travel Organisers' Licensing) Regulations 1995 can be the model for regulation of the Christmas club and prepayment sector, and there are people in the sector who welcome that idea. I am happy to report to the House that last week I sponsored a briefing on the Post Office's new Christmas club. That product is due to come to market in the next couple of weeks. The Christmas club is the Post Office's response to the challenge laid down by Brian Pomeroy in his report on the Farepak collapse. The report suggested that the Post Office would be the ideal institution to produce a Christmas savings product, owing to the extent of its network and the trust that consumers have for the Post Office brand. Such a product will also give local post offices another product to offer customers, and will hopefully help keep open branches such as Guildford Avenue and Wescott Place in my constituency, which are currently threatened with closure.
	Funds in the Post Office scheme will be locked away until 1 November 2008. The Christmas club card could then be used as a prepaid debit card with retailers signed up to the scheme or exchanged for gift vouchers at post office branches. I welcome this innovative product, because unlike hamper companies, the Post Office's product will be governed by strict e-money regulations. That is because it is based on a pre-paid card system. Money will be held in a protected account under the control of the Bank of Ireland, and the funds will be accessible only to club members.
	The Post Office has told me that it would welcome regulation, and that its business model would be viable were this House to legislate in this area. The short-term steps the Government took to provide protection for customers' payments have been good, with existing companies putting in place ring-fenced trust accounts supervised by a new trade association—the Christmas Prepayment Association.
	The companies in the hamper industry have introduced new safeguards for consumers' money in the form of independently controlled, ring-fenced trust accounts. The trusts will safeguard customers' money should a company go bust. Although such measures are welcome, they are only short-term steps, so I welcomed last November's confirmation from the Department for Business, Enterprise and Regulatory Reform that, for the longer term, the Government have received advice from the Office of Fair Trading and the Financial Services Authority on the regulatory framework. They will consider that further in the light of the Companies Investigation Branch inquiry into the activities that brought about the collapse of Farepak and its parent company, European Home Retail. That is good news, and I hope that the Government will consider giving the green light to this ten-minute Bill.
	My intention is that regulation will place future Christmas club savers on a par with savers using other financial products. It will close the loophole that currently exists, and enable Government to look at ways of closing the £29 million gap for the 122,000 people who lost their money with Farepak. It is the only solution, because without regulation we cannot be assured that something this devastating for low-income families determined to keep out of debt will not happen again.
	 Question put and agreed to.
	Bill ordered to be brought in by Anne Snelgrove, Chris Bryant, Lorely Burt, Ms Katy Clark, Michael Connarty, Mr. Jim Devine, Mrs. Madeleine Moon, Mr. Lindsay Hoyle, Bob Russell, Martin Salter, Bob Spink and Mr. Mark Todd.

Christmas Savings Schemes (regulation)

Anne Snelgrove accordingly presented a Bill to make provision for the regulation of Christmas savings schemes; and for connected purposes. And the same was read the First time; and ordered to be read a Second time on Friday 25 April, and to be printed [Bill 58].

Appointment of the Comptroller and Auditor General

Gordon Brown: I beg to move,
	That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Timothy John Burr to the Office of Comptroller and Auditor General.
	The National Audit Act 1983 prescribes that the Comptroller and Auditor General should be appointed by the Queen on a motion by the Prime Minister with the agreement of the Chair of the Select Committee on Public Accounts. Such a motion has been used only once, in 1987, when the then Prime Minister, now Lady Thatcher, proposed the appointment of Sir John Bourn. I am sure that the House will join me in expressing appreciation for the achievements of Sir John Bourn over his 20 years in service as he leaves at the end of this month.
	I first visited Sir John in the 1980s, more than two decades ago, and have always found him to be courteous in his dealings with Members of Parliament. I thank him for the work that he has done. The House will be aware that the Public Accounts Commission, under my right hon. Friend the Member for Swansea, West (Mr. Williams), is undertaking a review of the governance of the National Audit Office, which supports the Comptroller and Auditor General in his work. The commission has asked John Tiner, the former managing director of the Financial Services Authority, to advise that review.
	The position of the CAG was established nearly 150 years ago and it has been some 25 years since the reforms that saw the creation of the NAO, so the Government fully support the review and will allocate space in the forthcoming constitutional reform Bill for any necessary legislation agreed on a cross-party basis. The Government have taken a series of steps to enhance the transparency and accountability to Parliament of public spending, including the introduction of resource accounting and professional financial management in central Government. We will also align budgets, estimates and accounts to a common format to allow expenditure to be better tracked from allocation to spend.
	In our "The Governance of Britain" Green Paper we set out proposals for parliamentary scrutiny of certain key positions in which Parliament has a strong interest. I can announce that my right hon. Friend the Minister for the Cabinet Office has today sent to the Liaison Committee a list of public appointments that we propose should be subject to pre-appointment scrutiny by their relevant Select Committee. A copy has been placed in the Library of the House. The list includes the appointment of the future CAGs; the chairs of the Gas and Electricity Markets Authority and the regulators of water, communications, rail and post; chief inspectors; the Information Commissioner; the chair of the Committee on Standards in Public Life and senior ombudsmen. I am also grateful to the Public Administration Committee for its work on the issue, which is timely and relevant. We will welcome the views of the Liaison Committee on the list of proposed appointments. The laws governing certain appointments like that of the CAG will continue to apply.
	The motion before the House recommends that Tim Burr be appointed as the new Comptroller and Auditor General with the agreement of the hon. Member for Gainsborough (Mr. Leigh), the Chairman of the Public Accounts Committee. I am grateful for his support.
	Mr. Burr has been deputy CAG for nearly eight years, in addition to some seven years' previous service at the NAO managing the audit of Departments including the Home Office, Inland Revenue and Customs and Excise. That was preceded by a distinguished career in the civil service. I believe that Mr. Burr is eminently qualified to become CAG. Mr. Burr has undertaken to serve the House as CAG until the commission's new governance arrangements can come into effect. I commend the motion to the House.

Simon Hughes: We are grateful to the Prime Minister for his motion and his words of support. This is an important announcement regarding an important post, and a matter that Parliament has quite properly decided should be taken seriously. That is evidenced by the fact that the motion is in the Prime Minister's name and that he is here to move it.
	I join the Prime Minister in thanking Sir John Bourn for his service. All those who have worked with him have a high regard for what he has done and for his organisation during his period of tenure. I also welcome the Prime Minister's statement that he will implement the announcement that he made last July about his wish, and that of the Government, for a new process to scrutinise appointments of this nature. If the Liaison Committee and other Committees can act speedily, this appointment will, I hope, be the last when, as a matter of formal record, we are presented with a name but not a full CV—even though we know the details of the career of the proposed new Comptroller and Auditor General—and when no scrutiny of the appointment has taken place. I hope that the Liaison Committee and the Public Accounts Committee will move quickly to implement the new system.
	It must be right that senior public servants should be appointed only after Parliament has scrutinised their appropriateness for the post. It is right that when Parliament comes to vote on such motions, it should be assured that the proposal has been scrutinised by Members of the House and that a CV has been presented for consideration.
	I want to make two other points about the accountability and openness to which the Prime Minister is committed. The only thing that, unfortunately, marred Sir John Bourn's career was the subject of expenses. That matter came into the public gaze last year, in particular. He was regarded as having spent more money than was justified in relation to his job. The same issue has surfaced once in relation to the proposed new—

Mr. Deputy Speaker: Order. I hesitate to interrupt the hon. Gentleman, but I must say to him and to the House that the motion is specifically about the appointment of a particular person. Although I allowed the Prime Minister a certain amount of latitude, this is not an opportunity for a general debate.

Simon Hughes: Of course I accept that, Mr. Deputy Speaker, and I was not proposing that it should be. My point was that I hope that the new appointee's period of office, which I believe will begin on 1 February, will see an open regime, such as that which the Prime Minister has advocated elsewhere. The expenses of the new CAG and his colleagues should be in the public domain as a matter of course, as they are for all senior public servants. Our expenses are in the public domain, and that is proper and right. I hope that the new regime will ensure that that happens.
	We welcome Mr. Burr's appointment. We wish him well in his very important job. Scrutiny of the public accounts in this country by Parliament is very important and we all recognise that it is done better now than it has been in the past. We need to continue to do it well. We pay tribute to those on the Liaison Committee and the Public Accounts Committee who are part of the process. It is a good example of public service. It is important that Mr. Burr and his team do a good job to ensure that everything we spend is as well spent as possible, in the public interest.

Alan Williams: Yesterday, I received the Tiner review of the governance of the CAG and the NAO, which was referred to by the Prime Minister, although I have not yet had a chance to read it. It is now being circulated to the members of the Liaison Committee and the Public Accounts Commission. The commission will consider it at our meeting with Mr. Tiner on 5 February. We are grateful to him for producing that report so early.
	On the question of appointments, I thank the Prime Minister and welcome the pleasingly long list of appointments that will be referred to the Committees of this House. I shall have a response from the Liaison Committee within the next week or so, and we welcome what we have heard.
	As the Chair of the House of Commons Commission, I very often work with the hon. Member for Gainsborough (Mr. Leigh), who is the Chair of the Public Accounts Committee. He will be involved in the selection and appointment, although the Commission will not.

Gordon Prentice: Has my right hon. Friend formed an early view on the suggestion made at the meeting in December by the outgoing CAG, Sir John Bourn, that his replacement should have a limited tenure?

Alan Williams: That question was covered by the Tiner review. The Chair of the PAC and I believe that there should be a time limit. I have not read the Tiner review yet, but I suspect that the dispute will be more about the length of service than about whether there should be a limit.

David Taylor: My right hon. Friend will recall our recent discussions in this Chamber about the outgoing CAG, but is he aware that the typical tenure for parallel appointments in other countries is five years? It is never more than 10, and certainly nothing like the 20 years that Sir John has enjoyed—the second longest tenure in the post's history.

Alan Williams: Yes, I am aware of the tenure limits elsewhere. In preliminary discussions, the Chair of the PAC and I made it clear that we hoped that a limit would be adopted, and that up to 10 years would be appropriate. I therefore hope that my hon. Friend will be able to contain his impatience in that regard.

Richard Bacon: There is widespread agreement that there should be a time limit, and Sir John Bourn himself thinks so, but does the right hon. Gentleman accept that it should be longer rather than shorter? In the US, the Budget and Accounting Act 1921 sets a term limit of 15 years for the equivalent post there. That may be a little long, but might not a limit of only five or six years be too short?

Alan Williams: If I give any more commitments to the House, there will not be much point in having the report from John Tiner. I shall stick to what I have said already, which is that the Chair of the PAC and I feel that a limit of up to 10 years should be considered.
	As Chair of the Commission, I should like to express the House's gratitude to Sir John Bourn. We are indebted to him for his 20 years of service. There may be disagreements about some matters, but right at the beginning of his tenure in the post he did something of supreme importance: he made the early and brave decision that the NAO would deliver to the taxpayer £6 in savings for every £1 that the taxpayer gave him to carry out his duties. That was a risky decision, but he achieved the target that he had set. In fact, he increased the ratio to 7:1. At the request of the Commission and the PAC, he then raised it to 8:1, and subsequently to 9:1, which is where it stands today. Under Sir John Bourn, the NAO is producing savings for the taxpayer that are nine times as great as his total annual operational budget. This year alone, the savings are likely to total £667 million, and I am sure that that is delightful news for the Prime Minister. Sir John should feel proud of that achievement, and he deserves the House's thanks.
	Sir John Bourn has also recognised that the House of Commons has a wider responsibility in the world. Like the US, France and other nations, we have experience that is valuable for the emerging democracies. As the Chair of the PAC will no doubt say, our NAO and the system that supports it are greatly admired throughout the world. The NAO has fee-paying contracts with the UN and other international bodies to help emerging democracies establish systems of scrutiny and accountability. Sir John has taken some stick, including some from this side of the House, for the additional work that he has done, but I think that we owe the third world a duty to share our experience. We cannot tell countries what they must do; we can only share our experience, good or bad.
	Switching to my role as Chair of the Liaison Committee, I should like to thank Sir John Bourn for a third thing that he has done. One source of grievance between the PAC and the other Committees has always been that the NAO is a PAC asset. The PAC has guarded it jealously over the years but, at the request of the Liaison Committee and with the approval of myself and the Chairman of the PAC, Sir John has changed the NAO's role. He has started to give support to the Select Committees in the form of evidence and witnesses and, most importantly, by making available specialist secondees who help with the Committees' staffing and background work. That is an invaluable role for the NAO, and one that is very welcome. I think that Sir John has every reason to be proud of what he has done for the House of Commons and for Parliament in his 20 years as CAG.
	Finally, I welcome the appointment of Tim Burr. He is a delightful and very unassuming man, with integrity and great ability. He will do the job well, and I hope that he finds it a fascinating experience.

Edward Leigh: I am pleased to second the motion moved by the Prime Minister, for three reasons. First, it underlines the bipartisanship and the lack of party politics that should inform the work of the NAO and the PAC. Secondly, it underlines the supremacy of Parliament. The appointment to this country's oldest public office—it dates back to the 13th century, and has existed in its modern form for at least 150 years—can be made only on the Floor of the House of Commons by the Prime Minister of the day, with the support of the Chairman of the PAC, who is always a member of the Opposition.
	Thirdly, I have worked with Tim Burr for a number of years. He is a man of incisiveness and integrity, and the NAO will be in safe hands under his stewardship until a permanent successor can be found.
	I should like to pay tribute to Sir John Bourn, with whom I worked very closely.

Hugh Bayley: I am concerned about how the continuity of work is maintained when one CAG retires and another takes over. First, the NAO has joined a consortium—along with the Westminster Foundation for Democracy, the Commonwealth Parliamentary Association, the Clerk's Department and other bodies—that provides advice on strengthening parliaments abroad. I hope that work will continue.
	Secondly, I have been in correspondence with Sir John Bourn about how Health Ministers report to Parliament on independent NHS treatment centres, and he has commissioned an inquiry into that. Will the Chairman of the PAC give an assurance, to me and to other hon. Members with balls in the NAO's court, that there will be continuity in respect of work that is currently under way?

Edward Leigh: I can absolutely give that assurance—the king is dead, long live the king! The work will carry on. While Tim Burr is CAG, he will have all the powers and prerequisites of that office, and the NAO will carry on exactly as before.
	I should like to pay a short tribute to Sir John Bourn. In numerous private briefings, I have found him to be immensely patient and kind, despite all my shortcomings. He is a wonderful civil servant in that sense. He may be in his 70s, but he has the spark and energy of a man in his 40s.
	As has been said, Sir John has been CAG for more than 20 years. He has overseen a revolution in public accountability. He set a very ambitious agenda for the NAO from the outset and he followed some guiding principles that are still adhered to.
	First, audit must be unfettered. Sir John fought a long, and ultimately very successful campaign, to secure access to all Government Departments and agencies. Secondly, auditors must be professional and expert and he has equipped the NAO well. Next, we must have sound financial audit that requires modern professional accounting from Government. This is the point that the Prime Minister made, and it is an excellent one. Sir John's active support for the introduction of accruals accounting—I pay tribute to the work that the Prime Minister did while Chancellor of the Exchequer in that respect—has helped drag Departments from the dark ages of the penny notebook system into the modern world, vastly improving the quality of information available to Parliament. In addition, audit should always be prepared to tackle the tricky issues of the day and not be deterred by vested interests. Sir John has reported on wars, on every major private finance initiative—PFI—deal, on waiting times in the NHS and, most recently, on major projects such as the Olympic games.

David Taylor: The hon. Gentleman mentioned the magic three letters PFI, and I am sure that what he says about the Comptroller and Auditor General and the NAO is true in so far as it goes. He says that the NAO has got to grips with modern techniques and methods, such as PFI, but why were the early and middle years reports so insipid and ineffectual? It seems that the NAO was being sucked into the received wisdom that PFI was a good—

Mr. Deputy Speaker: Order. I am sure that the hon. Member for Gainsborough (Mr. Leigh) will not be seduced down that alleyway. He should not go down that route.

Edward Leigh: Suffice it to say that, in my view, Sir John has been quite robust, but I will leave it at that. Of course, he could not get involved in the politics or the policy issue of whether we go down the PFI route. That was not his remit.
	Sir John and I think that audit should shine light on often neglected areas, and his pioneering work on hospital infections, on services to stroke victims and, just last week, on services to people suffering from dementia, bear testament to his success. As the Father of the House has just said, audit should be able to prove its value. Sir John has set very stretching targets for the savings derived from the work of the NAO; they should generate £9 for every £1 spent. In those ways, Sir John has made a profound and lasting contribution to public audit and accountability. I pay tribute to him.

Bob Spink: Does my hon. Friend anticipate that Tim Burr will be able to improve on those financial savings?

Edward Leigh: It would be difficult to do so. The targets are already stretching and we do not want targets that start distorting the work of the NAO.
	I am pleased to second the motion to appoint Tim Burr pending the Government's new arrangements that will be agreed, as the Father of the House has said, by the Public Accounts Commission, shortly following John Tiner's review.

Philip Dunne: Before my hon. Friend finishes his tribute to the outgoing CAG, will he say whether he agrees that the work that Sir John Bourn did to introduce public accountability to the BBC in undertaking its value-for-money audits is something that should go down on the record sheet as one of his great achievements?

Edward Leigh: It certainly should, and we have a compromise at the moment. The Public Accounts Committee is strongly of the view that we should have full rights of access.
	Tim Burr has been a public servant for 40 years. He worked at the centre of government until he joined the NAO 14 years ago, and he has been Sir John's deputy for eight years. Tim Burr is very well qualified and I am confident that he will continue to develop the NAO's work during his time in charge.

Gordon Prentice: On the appointment of Mr. Burr, did the Member have a pre-appointment hearing with Mr. Burr before my friend the Prime Minister appointed him?

Edward Leigh: For Members who have just come into the debate, I should say that it is a temporary appointment, and I will talk about that in a moment if the hon. Gentleman gives me time. The governance of the NAO will be reviewed and the findings will be subject to debate on the Floor of the House, so we do not need to spend a lot of time on that issue now. However, needless to say, I think that we all recognise that the internal controls and administration of the NAO need strengthening. However, the cardinal principle that is very important for the House of Commons remains—that the CAG has the independence to write his own reports free from any interference from whatever quarter.

Bob Spink: Can my hon. Friend confirm whether Tim Burr will be an eligible candidate when the new and transparent appointment system is implemented?

Edward Leigh: Of course Tim Burr will be an eligible candidate, but I have had no conversation with him. He will hold the appointment until a permanent appointment can be made.
	This is only the second appointment under the current arrangements whereby the nomination is made by the Prime Minister with the support of the Chairman of the Public Accounts Committee. During the debate the last time this happened, there was considerable support for making the appointment entirely a matter for the House. That is not an unreasonable view, as the CAG is an Officer of the House and he must be independent of the Government. That point was not lost on the Labour party in opposition. Indeed, summing up in the debate on Sir John Bourn's appointment 20 years ago, the shadow Minister committed a future Labour Government to changing
	"the method of appointment so that there is no ambiguity between the role of the Executive and that of the House."—[ Official Report, 16 December 1987; Vol. 124, c. 1201.]
	My view, however, is that—I say this to the Prime Minister, to whom I am grateful for his presence—there is a need for the Government to have confidence in the person appointed because that person has unlimited access to all private papers and persons of the Government. Therefore, my view—of course, the House can take a different view—is that the current situation, in which both the Prime Minister and the Opposition Chairman of the PAC have to agree is not unreasonable. I say that as long as the Government appreciate the difference between selection and appointment. They need to be involved in the appointment, but not in the selection. That should be the job of the House.
	In this sense, I want to proceed according to statute and to precedent, and I want to follow closely the precedent set by my predecessor Bob—now Lord—Sheldon. He selected the candidate after exhaustive interviews and that selection was then put to Mrs. Thatcher and she approved it. Clearly the process now needs to be modernised in accordance with good practice. There needs to be openness, open advertising and transparency, and I would need to be advised by a senior board in accordance with modern practice. Although all that can be arranged in agreement with the Government, I hope that the board would consist of a recently retired very senior servant—perhaps a former permanent secretary—a senior accountant from private practice and perhaps a recently retired officer from the NAO. I would need to listen to and consider their advice, but the Government do not need to be involved in that part of the process; otherwise there is the danger that I could find myself steered in classic Whitehall fashion in the direction of a safe candidate. I am sure that that would not be good for the future independence of the position. The Government do not have a right to a final veto.
	Needless to say, I want to assure the House that I approach the task with the utmost seriousness. We all want to find someone of the highest calibre, great experience and, above all, independence of mind and spirit. I believe that such a person should serve for a fixed, lengthy and non-renewable term of the order of eight to 10 years, and they should not be allowed to return to the civil service if they came from it. There can be no question of their independence being compromised. All that is for discussion, but I assure the House that I am immensely proud of the independence and the work of the NAO and the Public Accounts Committee. During my watch, I will seek to preserve that.

Tony Wright: I associate myself with the generous tributes that have been paid to Sir John Bourn. His record is a distinguished one and I regretted very much that his final period in office was distracted by stories of exotic expenses. They should not be allowed to detract from the extraordinary service that he provided to the House and to the audit of public money over the years. I am sure that the appointment of Mr. Burr will be an excellent interim arrangement; I have no difficulties with that.
	I should like to pay tribute to a former Member of the House, John Garrett. He could sometimes be curmudgeonly, but he was an heroic and stubborn protector of the interests of the House when it came to public money. He died just a few months ago. Back in 1987—the only other occasion on which the House has had the opportunity to discuss a motion of the kind that is before us—he said:
	"the arrangements by which he"—
	that is, the Comptroller and Auditor General—
	"is nominated pay inadequate respect to Parliamentary democracy".—[ Official Report, 16 December 1987; Vol. 124, c. 1182.]
	That point has been picked up by the Chairman of the Public Accounts Committee. We have improved things since then, and I hope that we will improve them further.
	I agree with what has been said about the need to ensure that the Executive and Parliament have a joint interest in the appointment, for reasons that have been given. It is essential that there be fixed-term appointments. The emerging consensus is that key constitutional posts ought not to have open-ended terms of office, and the terms ought not to be renewed. It should not be possible to influence the process, and the terms should be secure and reasonably long. I hope that the appointment of the Comptroller and Auditor General will conform to that—it is, I think, what the Government want—and that there will be a consistent pattern for all the constitutional watch-dogs.

William Cash: In light of the hon. Gentleman's reference to the historical importance of the democratic principle, perhaps he will find it worth while to recall what Gladstone had to say on the subject when he introduced the arrangements in, I think, the 1860s. Many of the eternal truths that he laid out in an important speech on the subject are well worth rereading today.

Tony Wright: I am always glad to accept a reference to Gladstone. The period to which the hon. Gentleman refers was the great era of public service reform, which we should never forget. Until now, there have been difficulties and inconsistencies in how we make key public appointments. The issue of pre-appointment hearings has rightly arisen. I am glad that the Prime Minister said what he did, because it was slightly odd that when the Government came forward with their welcome list of suggestions for posts that would in future be subject to pre-appointment hearings by Parliament, the Comptroller and Auditor General was not on it, yet there could scarcely be a more pivotal position, as far as the interests of Parliament and the public are concerned. I am glad that we are attending to that.
	Alongside the issue of the extent to which Parliament is involved in such appointments, there is the question of which appointments should require the approval of the official Opposition. That is another check that we should put into the system. There is also the issue that we are discussing now—the final approval by Parliament, on a motion in someone's name. At the moment, there is considerable confusion on all those fronts. The Government today presented a list of suggested posts for which there should be pre-appointment hearings. So far there has not been clarity on what the basis should be for such a list, but perhaps the list will help us with that point. We need clarity, and that certainly applies to the appointment that we are discussing, too.
	There have been recent instances of the confusion that I mention. For example, Sir Michael Scholar's appointment as chairman of the Statistics Board was approved by both Houses of Parliament, but it did not have to be; it was just thought to be a good, constitutional thing to do, as indeed it was. That shows that there is inconsistency. The new chairman of the Committee on Standards in Public Life said recently that he would have liked a pre-appointment hearing, because it would have increased his authority, and that he would have liked his appointment to be subject to a resolution of the House, which would have allowed Members of all parties to support his appointment. We need to ensure consistency in the arrangements.
	After the review of the governance of the National Audit Office, and when we have taken a view on issues such as term limits, I hope that we will have a clear system, in which there are reasonable term limits—a subject that has already been mentioned. I hope that the appointment process will be controlled by the Commissioner for Public Appointments; that is the system that we have put in place over the past 10 or 15 years to ensure the integrity of the public appointments process. The system should be supervised by the Office of the Commissioner for Public Appointments, and should be linked to pre-appointment hearings in the House, which would, I presume, be held by the Public Accounts Committee. That would give Parliament a role in the process. A motion should also be brought before the House, as has happened today. I hope that that is the process at which we arrive. In a sense, we are discussing an interim point on the journey to that destination.

Alan Williams: The Comptroller and Auditor General's independence from the Executive is of absolute, fundamental importance. The format that my hon. Friend proposes presents us with a problem, because of course the Government control the majority in the House. I foresee a danger, and I ask him to think about it, as I know that he is open-minded. There is a danger that if we demand a vote in the House—this may sound undemocratic, but I cannot see a way around that—and the Government used their Whips, we could end up with a Government appointee. That is a dangerous possibility, so I ask my hon. Friend to think twice about that.

Tony Wright: My right hon. Friend's concern would be met if we insisted on parliamentary involvement in the process. The new element will be the direct involvement of Parliament through a pre-appointment hearing, in which Parliament assures itself that the candidate is robustly independent.

William Cash: Will the hon. Gentleman give way?

Tony Wright: No, because I am about to finish my speech, but before I do so, let me say that if anyone would like to read further thoughts on the subject, the Public Administration Committee has just issued an excellent report, "Parliament and public appointments: Pre-appointment hearings by select committees", which deals with many of the issues involved. I recommend it to the House.

David Gauke: rose—

Edward Leigh: Will the hon. Member for Cannock Chase (Dr. Wright) give way on his last point?

Mr. Deputy Speaker: Order. I think that we ought to move on.

David Gauke: Thank you, Mr. Deputy Speaker. I thought I was about to have the new experience of being intervened on before I had begun my remarks.
	First, I join right hon. and hon. Members in paying tribute to Sir John Bourn for the service that he has provided in his 20 years as Comptroller and Auditor General. He has been an effective examiner of Government expenditure and provided outstanding service in identifying waste, as the Father of the House eloquently explained. Sir John also showed support for the Public Accounts Committee, which does so much to protect the interests of the taxpayer. As we have heard from my hon. Friend the Member for Gainsborough (Mr. Leigh), the Chairman of that Committee, Sir John has been an invaluable servant of the House.
	The National Audit Act 1983 enables the CAG to carry out examinations of the economy, efficiency and effectiveness of public bodies and Government Departments. I do not want to shatter the bipartisan atmosphere, but I must say that never before has that role been so necessary or so relevant. Hon. Members of all parties recognise that although public spending may be very high, there are still great questions about the economy, efficiency and effectiveness of much of that spending. In that context, the appointment that we are debating is of considerable importance.
	Sir John has undoubtedly learned a great deal in his 20 years as Comptroller and Auditor General. He wrote about his experiences in his recent book "Public Sector Auditing: Is it Value for Money?", which is so popular that the Library was unable to locate a copy of it when I asked it to do so earlier this week. It had been deluged with requests for it. He characterised public sector bureaucracy as something that
	"looks inward, not outward, to process rather than outcomes, to hierarchies rather than teams, to rules rather than initiative and to detachment from, rather than engagement in, human interests".
	It is certainly not for the National Audit Office to solve all those problems on its own, or even by working with the Public Accounts Committee. Those problems need to be addressed through a more fundamental change to how government is run.

William Cash: I endorse all the remarks that have been made about Sir John Bourn and the distinguished service that he has provided to the nation. As my hon. Friend is moving on to the subject of the Public Accounts Committee in relation to the NAO, may I reaffirm that it is essential that the chairmanship of the PAC is in the hands of the main Opposition party? That also deals with the question of parliamentary control, to which the Father of the House referred. Above all else, there must be maximum independence in such a vital constitutional area.

David Gauke: My hon. Friend makes an important and valuable point. I shall shortly turn to the issue of the independence of the CAG. As part of the overall process, the chairmanship of the Public Accounts Committee is rightly in the hands of a member of the Opposition. I do not believe that there is any desire on any side to change that. I am happy to reaffirm what my hon. Friend said.
	The National Audit Office and the CAG can identify the worst examples of lack of economy, inefficiency and ineffectiveness in the public sector. Under Sir John's leadership, and in partnership with the Public Accounts Committee, they have consistently done so.
	One of the reasons why Sir John has been successful is that he has been demonstrably independent of the Executive—a point made by a number of right hon. and hon. Members. He has done that in various ways. He has been straightforward in his reports, and he has not pulled his punches. In November, for example, he released e-mails demonstrating that senior HMRC staff were aware of the full child benefit database being provided to the NAO, and that the debacle could not be blamed entirely on one low-level official. That demonstrated, once again, Sir John's independence.
	There are various matters in respect of independence that need to be raised in the context of the motion. On the first, I hope the House will forgive me for making a controversial point. The economics editor of  The Sunday Telegraph, Liam Halligan, wrote at the weekend that it remains his view that Sir John
	"has been hounded out of office—after a series of heavily spun leaks against him—by ministers tired of being held to account by Bourn and his auditing team."
	I would be grateful if the Exchequer Secretary could confirm in the course of her remarks that, as far as she is aware, no Government Minister, official or special adviser has briefed against Sir John.
	Another issue is the appointments process, which we have been debating for some time. Like my hon. Friend the Member for Gainsborough, the Chairman of the Public Accounts Committee, and the hon. Member for Cannock Chase (Dr. Wright), the Chairman of the Public Administration Committee, I have been reading the  Official Report of the last time the matter was debated, in December 1987. As has been said, a number of Labour Members, including their Front Bencher, the Treasurer of Her Majesty's Household, the right hon. Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown), who no doubt follows these matters closely and is present today, suggested at that time that Parliament might have a greater role in the appointments process to ensure independence from the Executive. Indeed, the right hon. Gentleman went on to state:
	"The Labour party intends to give effect to this principle when in government"—[ Official Report, 16 December 1987; Vol. 124, c. 1201.]
	There has been on the Government's part no unseemly haste to do so but, as we have heard, John Tiner is reviewing the corporate governance of the NAO and we may soon have proposals on these matters. Indeed, we have heard proposals from the Minister for the Cabinet Office. There seems to be a mood on both sides of the House in favour of greater transparency and parliamentary involvement in public appointments. We await Mr. Tiner's proposals with interest and look forward to examining the proposals from the Minister for the Cabinet Office. Contrary to what the Prime Minister said, we have just checked with the Library and details are not yet available there.
	In fairness, we should acknowledge that under the current arrangements for the appointment of the CAG the Chairman of the PAC has a key role in the appointment, as we heard from my hon. Friend the Member for Gainsborough. No one doubts his independence from the Executive, or generally. The fact that an Opposition Member has an influential role in the appointment is important, as the Father of the House observed, allowing greater parliamentary involvement. We must ensure that the governing party, whichever party it may be, does not have too much control through the use of its Whips. There is clearly a balance to be struck, as the Chairman of the PAC recognised.

Edward Leigh: That is an important point and it should be underlined. At present there is a complete balance because the Chairman of the PAC is, by definition, from the Opposition and the Prime Minister is, by definition, from the Government. It sounds very democratic—I say this to the Chairman of the Public Administration Committee—to hand the appointment over to a Committee, but under the rules of the House, a Committee would always have a Government majority so it would appoint somebody and that would be approved by the Government. The Government would thus effectively make the appointment, which would be dangerous. The present system, which was created under the 1983 Act, was probably quite a wise compromise.

David Gauke: I am grateful to my hon. Friend. As has been mentioned, the fact that the Chairman of the Public Accounts Committee is an Opposition Member provides a degree of balance within the system. If that role is diminished to any extent, we need to consider the issue of balance.
	In the context of the Tiner review, it is entirely understandable that the appointment of Mr. Burr is only temporary. A full explanation has been provided by the Prime Minister. Without any criticism of Mr. Burr—a man of integrity and incisiveness, as we heard from my hon. Friend the Chairman of the PAC—we should acknowledge that short-term appointments can weaken the perception of independence.
	When appointees are waiting for a decision from the Executive as to reappointment, there may be a perception that that official is not entirely independent and that he is in some respect beholden to the Executive. In the current economic conditions, the point is particularly relevant to the delayed appointment of the Governor of the Bank of England, but I shall not dwell on that. The point should be taken into account in any appointment process where independence from the Executive is crucial.
	Finally, I welcome Mr. Burr to his new role. As we have heard this afternoon, those who know him speak highly of him. He has already given a number of years of distinguished service to the National Audit Office. I know that going from No. 2 to No. 1 in an organisation is not always easy, as the Prime Minister may agree. None the less, we wish Mr. Burr well for the future.

Angela Eagle: I close the debate by echoing from my own experience the tributes that have rung out from all parts of the House this afternoon to the record, experience and public service of Sir John Bourn, who retires at the end of the month.
	The most important Select Committee on which I served when I first entered the House, when we were in opposition in the 1992-97 Parliament, was the Public Accounts Committee. At that time, Sir John was relatively new in his period of service, and I found him an extremely courteous and sophisticated Comptroller and Auditor General, who was always willing to listen to questions from new Members and help them with the complexities of holding the Government to account through the work of the PAC and the National Audit Office. If anyone went to him worried about issues in particular Departments, he was always ready with an interested ear and an arched eyebrow, full of good suggestions about how to pursue the matter—indeed, he often allowed the NAO to pursue it, to the benefit of the effectiveness of public expenditure.
	I pay my own tribute to Sir John as Comptroller and Auditor General. As has been said, he served for 20 years, and it is not an inconsiderable achievement to establish and maintain an excellent record for leadership when in the public gaze for so long. He steered the NAO into becoming a body that, as many right hon. and hon. Members have said today, is regarded as world class by its profession. It is influential internationally and does an extremely good job in the UK in ensuring that we get best value for money from our public expenditure.
	As there has not been a new CAG appointment since 1987, I take this opportunity to emphasise the Government's regard for the importance of the ability of the CAG and the NAO to secure their professional independence as auditors of the Government and, obviously, of the Government's accountability to Parliament.
	As many Members have mentioned, it is especially important that the CAG be independent. In addition to supporting Parliament in holding the Government to account, the NAO helps to improve government through objective reporting and recommendations for improved management practices. Departments in Whitehall do best by taking a great deal of notice of such recommendations; after NAO reports are published, Departments put a great deal of effort into mending their ways and closing the loopholes that have led to inefficient spending. The NAO also helps citizens by providing greater transparency, bringing their concerns to light and prompting improvements in public services and public service outcomes. All of us in this House have an interest in that.
	The NAO's role and responsibilities have substantially increased since 1988 and they continue to evolve. Since Sir John took up his post in that year, the number of financial reports has remained broadly the same at about 480. However, their scale and complexity have increased through the changeover to accruals-based resource accounting. In 1988, the NAO produced 31 value-for-money reports, seven memos to the Public Accounts Committee and two reports on the accounts. In 2007, it produced 60 value-for-money reports and 25 reports on the accounts. In addition, the NAO now reports on a range of other matters, including annual reports on budget assumptions and impact assessments.
	In 1988, the NAO supported 30 meetings of the PAC; sometimes it seems as though that Committee now has more meetings than that in one week. In 2007, that number had increased to 58, with 61 PAC reports, and the NAO now supports 13 other parliamentary Committees. For me as the Treasury Minister with responsibility for ensuring that we try to increase our productivity as a country, the interesting statistic is that in 1988 the NAO employed 900 staff; by 2007, that number had fallen to 850. We are getting a great deal more effort, work and added value from a slightly reduced staff.
	In 1988, 40 contracts had been outsourced; in 2007, that number had increased to 155, which amounts to about 25 per cent. of NAO resources. I have twice been a member of the Public Accounts Committee and my experience is that the NAO benefits greatly from the transfer of information from the private sector and other areas through secondments and outsourcing.
	Since 1997, the CAG has reported annually on financial management in the European Union. In recent years, he has also been asked to undertake a range of substantial reviews at the Government's request, such as a review of the Financial Services Authority in 2007 and a review of Home Office statistics on asylum and migration in 2004. As to the future, the House will know that provisions in the Companies Act 2006 will enable the CAG to become eligible to audit non-departmental public bodies. That is likely to add a further 80 or more bodies to the audit portfolio.
	I should reiterate what my right hon. Friend the Prime Minister said: in its July 2007 report, the Public Accounts Commission decided to review the corporate governance of the NAO to ensure that it is in line with best practice. We have heard from my right hon. Friend the Member for Swansea, West (Mr. Williams); he was probably the most long-standing member of the Public Accounts Committee and is chairman of the Public Accounts Commission, as well as being Father of the House—a triple whammy. John Tiner agreed to chair that NAO corporate governance review; my right hon. Friend said that its report has arrived on his desk, but that he has not yet had time to read it. Obviously, the corporate governance of the NAO is of great interest to all of us and we look forward to the Public Accounts Commission report, its response to Mr. Tiner's suggestions and its suggestions on how to take forward the new management arrangements for the NAO and the office of Comptroller and Auditor General.
	As my right hon. Friend the Prime Minister said, the Government have agreed, if necessary, to enact reforms to the governance of the NAO that proceed from the Public Accounts Commission's decisions. I look forward to receiving the commission's detailed suggestions in due course.
	Finally, I echo the widespread welcome today for Mr. Burr's appointment. I agree with right hon. and hon. Members from across the House that he is eminently qualified to assume the post of Comptroller and Auditor General. He has made a substantial contribution as Sir John Bourn's deputy over the past eight years, and I am grateful for his flexibility and understanding in stepping into the role while the Public Accounts Commission continues its work on governance. I note that Mr. Burr has indicated his intention to serve as Comptroller and Auditor General only until the reforms flowing from the process are completed and in place, and I thank him for that. I support the motion.
	 Question put and agreed to.

Michael Penning: On a point of order, Mr. Deputy Speaker. While the House has been sitting, tens of thousands of off-duty policemen have been demonstrating on the streets of London. Many are lobbying hon. Members of the House. They are demonstrating because the deal that they had with the Government has been reneged on and their pay agreement has been broken. Has the Home Secretary given any indication to the Speaker's Office whether she is going to come to the House and explain how the Government got into this mess?

Mr. Deputy Speaker: As I am sure the hon. Gentleman will realise, that is not a matter for the Speaker at this stage.

Orders of the Day

Sale of Student Loans Bill

As amended in the Public Bill Committee, considered.

Clause 1
	 — 
	Sale of student loans

Robert Wilson: I beg to move amendment No. 5, page 2, line 6, at end insert—
	'(4A) Transfer arrangements may not confer on the purchaser the right to alter the repayment terms of sold debts.'.

Mr. Deputy Speaker: With this it will be convenient to discuss the following amendments: No. 6, page 2, line 11, at end insert—
	'(6A) Transfer arrangements may not be made with an organisation underwritten by the Government.'.
	No. 11, page 2, line 13, at end insert—
	'(8) In advance of entering into transfer arrangements the Secretary of State shall—
	(a) examine the prevailing market conditions and ensure that a competitive market for the loans has been generated;
	(b) provide the market with full information about the loan book in order that the assets can be efficiently valued;
	(c) ensure that there has been a genuine transfer of risk from the public accounts to the private sector; and
	(d) assess the proceeds that look likely to be achieved in the transaction, using full and clear market information and a comparison with keeping the loans on the Government books, in terms of both likely income flows and levels of risk.
	(9) The Secretary of State shall make a written statement on expenditure incurred in connection with each transfer arrangement.'.
	No. 7, clause 5, page 4, line 9, leave out
	'a person acting on behalf of a loan purchaser'
	and insert
	'the Student Loans Company'.
	No. 8, page 4, line 15, leave out 'another agent' and insert 'the Student Loans Company'.

Robert Wilson: There are still some unresolved issues raised by hon. Members on Second Reading and in Committee that Conservative Members hope to clarify with our amendments. I am sure that the Minister will do his utmost to help the House by providing the clarity that we all seek.
	The amendments have three important objectives: first, they would prevent loan purchasers from altering repayment terms; secondly, they would ensure that Ministers achieve value for money in any sale; and finally, they would strengthen the ability of this House to hold Ministers and the Government to account. That is key, because too much of the Bill is to do with the Minister and the Department saying to Parliament, "Trust us." The Opposition would not be doing our job if we left it at that, so our amendments would add a few checks and balances to the sale of the loan book.
	Amendment No. 5 reflects our ongoing concern about a lack of safeguards in the Bill. Clause 1 enables the Secretary of State to sell to a purchaser his rights and obligations relating to student loans and gives details of the rights and obligations that may be transferred if the Secretary of State so wishes. Throughout the Bill's passage, concerns have been expressed about the precise nature of the transfer of those competencies and what it will mean in practice. I know that the Minister shares our concerns, and my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) raised his concerns in detail in Committee. Let me make the point clearly: loan purchasers should not be able to alter the terms of repayment. The Minister entirely accepts that; he said himself, on Second Reading,
	"I need to make one precise point clear at this stage. The Government will retain control of regulations, terms and conditions for all loans, and there will be no adverse change for borrowers, whether their loan is sold or retained."—[ Official Report, 22 November 2007; Vol. 467, c. 1391.]
	I entirely accept his assurance about the Government's intentions—I am sure that they are entirely honourable—but this is not necessarily about the current Minister or the current Secretary of State; it is about how Ministers may use or interpret those powers in future.

Angela Watkinson: My hon. Friend will understand that when students who already have loans hear about the sale of the loan book they will start to worry about the possible changes in terms and conditions of repayment. It is important that during the course of the debate we are able to secure agreement so that we can reassure not only students with existing loans but those about to take out loans.

Robert Wilson: My hon. Friend makes a valid point. I hope that in the course of the debate we will get the reassurances that she seeks.
	Clause 1 is ambiguous in that respect and needs to be tightened. It empowers Ministers to prevent loan purchasers from changing the terms of repayment, but that is not the same as offering an explicit safeguard against differential terms of repayment. The Minister has repeatedly stated that the Bill will have no material impact on graduates, but that proposition currently rests on the good will of the Government—the "trust us" message that I mentioned. Some would say that that is a pretty precarious safeguard these days. The protections that the Minister has cited are insufficient. There is nothing in the Bill to prevent different arrangements for loan repayments as long as those are made with a Secretary of State's consent. Although the measure enables the Secretary of State to protect student borrowers once loans are sold, a flaw remains—its reliance on optional rather than concrete safeguards. Our amendment would strengthen the Bill by ensuring that the Government's stated intentions are followed without any ambiguity.
	It would be inappropriate to try to bind the hands of the Minister's successors in perpetuity, but we in this House have a duty to protect the interests of students and graduates. The amendment tries to strike the difficult balance between limiting risk for graduates and students and maintaining the commercial attractiveness of the loans to a purchaser.
	In Committee, the hon. Member for Wolverhampton, South-West (Rob Marris) sought more information and asked significant questions about this matter. His constituency has a large number of students, many of whom are disadvantaged and therefore take out large loans. As an assiduous Member, he seeks to protect those students. If the Minister has time before he comes to the Dispatch Box, he may wish to reread the hon. Gentleman's remarks in column 47 of the record of the Committee proceedings.
	The hon. Gentleman was rightly concerned that paragraph 16 of the explanatory notes says:
	"For example, the Government does not intend to grant purchasers the right to alter the repayment terms of sold debts."
	The key words are "does not intend". It reminds me of the saying, "The road to hell is paved with good intentions." Merely intending to good without actually doing it has no value, so what is said in the explanatory notes is not a guarantee; it gives students and graduates no reassurance about what may or may not happen in future.
	The Minister agrees with us that the purchaser should not be able to alter repayment terms of sold debts, so I am sure that he will accept this very mild and minor amendment. If he does not, perhaps he can explain to the House why he does not want to do so—unless my eloquence has already changed his mind. We can then decide whether we wish to press it further.
	Amendment No. 6 deals with a matter that has been discussed in Committee, but not in great depth, and Conservative Members have not been reassured by the Minister's comments. It is still possible that a body buying part of the student loan book will in time sell it on and that, as a result of that process, the loan will end up in an organisation that is underwritten by Government. The amendment would therefore be an important safeguard.
	The main justification that we have heard for the use of ministerial veto over onward sale is to safeguard the interests of students. We can therefore deduce that Ministers would use their powers of veto to protect interest rates or repayment terms. However, alongside students' interests we must consider the public interest more broadly. The Minister has said that one of the aims of the Bill is to transfer risk to the private sector from the public sector. At present, however, there is nothing in the Bill to prevent loans from ending up, through a process of resale, being underwritten by the public purse. In Committee, the Minister said that the Bill provides tools for the Secretary of State to prevent that, but that is not good enough.
	The Bill offers wide-ranging powers to Ministers but has very few checks or balances. As it stands, these assets could be resold to a Northern Rock-style company or an equivalent organisation—the Minister did not deny that in Committee. We must remember that we are talking about public assets worth about £18 billion, and growing. The Government want a portion of the loan book to be transferred to private hands, and our amendment would assist that process. Let me be absolutely clear: transfer arrangements should not be made with an organisation underwritten by the Government. Can the Minister tell the House how he plans to make a cast-iron case that that should not and cannot happen?
	Amendments Nos. 7 and 8 relate to the collection of debt. We are anxious to ensure that only the Student Loans Company is authorised to collect debt. The Bill says that "another agent" or
	"a person acting on behalf of a loan purchaser"
	should be allowed to collect debt, but the amendments would replace those with the Student Loans Company. That is because, as debt is sold and resold, there is a risk that the propriety and suitability of the debt collector may become a matter of concern. The current provision will certainly cause a great deal of anxiety on the part of debtors who are accustomed to debt being collected by the Student Loans Company or by commissioners for Her Majesty's Revenue and Customs. Our amendments would eliminate those concerns.
	Amendment No. 11 is the most controversial in this set of amendments. It is fair to say that Conservative Members have not been sufficiently reassured, either on Second Reading or in Committee, that the taxpayer will get the best possible outcome from the sale of the student loan book. The Bill empowers Ministers to sell off a very valuable public asset—currently worth around £18 billion and due to grow significantly in value over the next few years to as much as £25 billion—but it contains no provisions to ensure that the Government have a duty to get value for money.
	Concerns about value for money are widespread and have been voiced by Members in all parts of the House, with the hon. Members for Stoke-on-Trent, South (Mr. Flello) and for Wolverhampton, South-West making telling contributions in Committee. However, we do not wish to tie Ministers' hands too tightly, as we are well aware that we may inherit the legislation and we understand its importance to future public finances. When we are in government, we may well need to deal with such issues.
	Our amendment sets boundaries within which the Minister should operate. They are designed to ensure, first, that a competitive market is generated, thus achieving the best value; secondly, that the market has full and up-to-date information about the loan book for efficient evaluation; thirdly, that there is a genuine transfer of risk away from the public sector to the private sector; fourthly, that the Secretary of State will assess the market value likely to be achieved against keeping the loans on Government books; and finally, that the Secretary of State will keep the House informed of the costs incurred in selling each tranche of the loans to the private sector.
	It would be difficult for the public to understand why the Minister would oppose any of those boundaries. Indeed, throughout the various stages of the Bill he has, at one time or another, accepted those points as valid. They are the same value-for-money criteria that were described to the Committee by the director of student finance and strategy, Michael Hipkins. However, such provisions were not included in the Bill. The legislation empowers Ministers to sell off a student loan book currently worth £18 billion, but it provides no clear mechanisms for holding Ministers to account for their actions. We would not be doing our job as legislators if we allowed it to pass with such a huge omission.
	How do we ensure that the Government stay focused on getting the best value for the taxpayer, now and in the future? The economic storm clouds have been gathering. The markets are likely to be volatile for at least the next two years and financial institutions are therefore likely to take a very cautious approach. But we also know, as the Minister admitted in Committee, that the Government have £6.3 billion already written into the comprehensive spending review. That money is already allocated to be spent before anyone has signed on the dotted line—nobody has signed a contract. We have a duty to ensure that negotiations, as and when they take place, meet the Minister's high expectations.
	In future, how will a Minister or Secretary of State withstand the Treasury juggernaut as it seeks to force a future sale of student loans to raise a fast buck? Is anyone in this House convinced that any Minister will be able to resist? How can we ensure that true value for money is achieved? In light of difficulties over Northern Rock, general volatility in the credit markets and pressure on public spending, we feel it necessary to set out some safeguard that will protect a Minister from Treasury pressure. It is a sensible precaution and one that the Treasury will not like, of course, but it is certainly in the best interest of this country.
	Our amendment would add to the Bill a clear, value-for-money framework to which Ministers must adhere. Do not take my word for it—the basis for the wording is the Minister's own, taken from Second Reading. I do not intend to read all of his comments out. If our amendment were accepted, the Secretary of State would have to examine the prevailing market conditions and present full information about the loan book to ensure a correct valuation.
	The Secretary of State would also have to ensure that there was a genuine transfer of risk to the private sector. That is an extremely important point, the significance of which has grown in recent weeks as the Northern Rock saga has unfolded. The hon. Member for Twickenham (Dr. Cable) encapsulated the point when he described the Government's dithering as the "nationalisation of risks and losses, combined with the privatisation of gains."

Stephen Williams: Excellent.

Robert Wilson: Indeed, it was excellent.
	However, based on what the Minister said in the evidence session, such a transfer will not take place. He may remember that I asked him how student loans would be selected for sale, and he replied,
	"we want to engage initially with loans where we can demonstrate a good track record of graduates repaying". ——[Official Report, Sale of Student Loans Public Bill Committee, 4 December 2007; c. 31, Q87.]
	In other words, the purchaser will not be taking on a great deal of risk because the best loans will be cherry-picked for them. There will be no random selection, just the crème de la crème of the loans. As the Minister said, only those loans with a demonstrable track record will be sold.

Bill Rammell: Will the hon. Gentleman be very careful in quoting from  Hansard and then inserting his own view? The way he read his description of my comments did not make the distinction clear at all. I made it perfectly clear in the evidence session that individual student loan accounts would not be cherry-picked. There would be a tranche of student loans, with a good track record, evidenceable and demonstrable, of repayment across the board. It is not a matter of individual case by individual case.

Robert Wilson: I will come to that, because I have reread the exchanges involving the Minister and Mr. Hipkins in Committee on several occasions, and I have two points that I think will answer his questions. First, the position of the Government seemed to alter through the exchange, and secondly, any loan that is high risk will not be put up for sale. That came across clearly during that exchange.
	If the most reliable debts are sold off while the more precarious ones remain in public hands, is there really a transfer of risk at all? As with Northern Rock, the Government seem prepared for risk to be nationalised while gain is privatised. That is why it is important to include an assessment of the risks against the income flows in the Bill. It is vital that provisions that hold Ministers now and in the future to account are included in the Bill.
	Finally, we are asking that the Secretary of State should also make a written statement to the House on the expenditure incurred in connection with each transfer arrangement. I understand that subsidies will not be paid to loan purchasers this time, so the overall cost of the sale may be comparatively small next to the £6.3 billion income. However, the Bill empowers the Secretary of State to incur expenditure in connection with any sale. It is only fair and reasonable for Ministers to report back to the House regularly on the expenditure incurred by the Government.
	The amendments are not wrecking amendments. They are clear safeguards for graduates and taxpayers. There is enormous concern throughout the House about how we achieve value for money through the Bill. I hope that the Minister will agree that the only way to ensure that there is no ambiguity is to include provisions in the Bill. All we are doing is urging the Minister to accept what he has already approved in practice. Our amendments clarify weaknesses in what is otherwise a worthy Bill.

Stephen Williams: Several changes have occurred in my party in the past few weeks, for reasons that are obvious to everybody. I therefore took no part in the Second Reading debate or in what I am sure were exciting and incisive contributions from the Minister for Lifelong Learning, Further and Higher Education and the Conservative spokesman in Committee. I have only had sight of the amendments today, so if I make any points that have been answered in previous discussions, I apologise.
	Amendment No. 5 would provide that purchasers have no right to alter the repayment terms of any debts that are sold. That is a worthwhile condition to include in the Bill. Protection should obviously be in place for graduates for all their repayment terms—the threshold at which they begin, the rate at which they pay and the period over which they make the repayments. Only hon. Members, through the democratic process, should alter those conditions in future. We are therefore happy to support the amendment.
	Amendment No. 6 refers to transfer arrangements, and would provide that they are not made to an organisation underwritten by the Government. When I read the bald phrasing of the amendment, I wondered to what the hon. Member for Reading, East (Mr. Wilson) was alluding—the Export Credits Guarantee Department or another organisation that the Government might underwrite. It was in fact an attempt to inject a further discussion about Northern Rock into parliamentary proceedings. Of course, the leader of the Conservative party has for several weeks been trying to steal my deputy leader's thunder on that during Prime Minister's Question Time. Leaving that aside, the amendment is logical. If we are considering a genuine sale of the loan book, there should also be genuine transfer of risk. There should be no danger of the risk becoming circular and travelling back to the Government and the taxpayer if the loan book were purchased by an organisation that had, now or in future, a direct connection to the Treasury or another part of Government.
	Amendment No. 11, which, like two others in the group, would amend clause 1, would provide that the Secretary of State must ensure that he has examined the prevailing market conditions and that competitive conditions have been generated for the sale of the debt. That seems common sense. I am prepared to accuse the Government of many things, but I am sure that they would not wilfully sell off £6 billion of debt—if that is the true figure—at a substantial discount that would cause them to be examined by the National Audit Office and the new Comptroller and Auditor General, whom we discussed earlier.
	The amendment would also provide that full information would be placed in the market. Again, I doubt that anyone would buy a chunk of Government debt if full information were not put in the marketplace. I should like an assurance from the Minister that normal due diligence procedures will apply and that full information will be provided to anyone who contemplates buying up to £6 billion of a current Government asset. Of course, there should be genuine transfer of risk. Finally, we obviously support the test of whether selling off the loan book, compared with keeping it in the state-controlled Student Loans Company, constitutes genuine value for money for the taxpayer.
	Like me, the hon. Member for Reading, East got interested in politics in the 1980s—I believe that we were in the same party at that point.

Robert Wilson: No, we were not.

Stephen Williams: We have been in the same party at one point.

Robert Wilson: No, we have not.

Stephen Williams: We were both members of the Social Democratic party once.

Robert Wilson: No, we were not.

Stephen Williams: I stand corrected.

Robert Wilson: I was not!

Madam Deputy Speaker: Order. May we please have order in the debate?

Stephen Williams: I find it ironic that Conservative Front Benchers have tabled the amendments, whatever political perspective the hon. Gentleman supported in the 1980s. In all its privatisations in the 1980s and 1990s, the Conservative party did not necessarily guarantee full value for money for the taxpayer— [ Interruption. ] The hon. Gentleman looks sceptical—let me give the example of the Royal Ordnance sell-off or even the railway sell-off.

Madam Deputy Speaker: Order. Let me remind hon. Members of the rules of procedure. If hon. Members wish to make a comment, I am sure that they will do it in the usual way, through intervention.

Stephen Williams: I shall move on, having made those points. We agree that there should be a statement of the costs of selling the loan book.
	The final two amendments in the group would insert "the Student Loans Company" in the Bill instead of the unspecified person who may act for whoever purchases the loan book. We are prepared to support that because it gives comfort and certainty to students or graduates to know that, when they repay their debt, they are dealing with a consistent agent for collecting it and that the information and conditions are transparent.

Alan Simpson: The amendments raise some important points, which I hope that the Minister will tackle. I believe that my concerns fit the same pattern.
	They begin from the same question: who, in their right mind, would want to buy someone else's debt? Why would they want to do that?

Rob Marris: Ask Northern Rock.

Alan Simpson: Indeed. The obvious answer is that it would be done for foolish or speculative reasons or on the calculated basis that the purchasers would make money. For most of us, if we try to move our debts around, we do so to avoid or reduce costs. People do that when they reschedule their mortgages or move their credit card debts between different companies. However, in the context of the transfer of student loans, we are offering the prospect of transferring those debts from the public sector—the Government—to the private sector, which must envisage opportunities to make money out of the process.
	We, as the Government, have a duty to protect students who have entered into debt in the first place. The guarantees and protections of the students and the taxpayers, of whose interests we must take account, must be clearly bolted in position. My current difficulty is that I cannot see those belt-and-braces protections. It is clear from the comments so far that prospective purchasers cannot hope to make money through taking on increased risk because, as Opposition Members made clear, there will be some selection in the process to minimise the risk. It will be hard to justify the notion of selling the debts below value on the grounds that a risk element will be built into the calculation.
	On the first tranche of student loan sales, the then Minister, my hon. Friend the Member for Leeds, East (Mr. Mudie), conceded that the loans had been undervalued. He said in response to a question on 9 March 1999:
	"The estimated cost to the Government of selling these loans will therefore be in the region of £85-£100 million or 25-30 % above the cost of keeping loans in the public sector over the lifetime of the portfolio."—[ Official Report, 9 March 1999; Vol. 327, c.106W.]
	That estimate was made of the increase in cost of transferring the loans from the Government to the private sector. It would be a somewhat strange and curious transaction if we sought to make those transfers at a cost, rather than at a benefit. I am therefore looking to the Minister to clarify the fact that we will not expose people to predictable additional costs to themselves, or to losses as taxpayers, through the three most obvious ways in which people can make money from the transaction.
	The first way in which the banks could make money would simply be to do nothing, if the debts of the student loans are transferred at below their real asset values. The banks could then just sit on the debts, which will appreciate, because at some point they will be realised at their true market price. The second way would be to sell the debt at a higher price to another bank, so that the selling bank would make an immediate profit and the buyer would take on the cost of the risk. Again, that would happen only if we as a Government sold the debt at a below-par valuation.
	The third way of making a considerable gain out of the process would be to have the ability to increase the interest rates being charged on the loans. That would transfer the risk to the students who had entered into those loans, at what they thought were guaranteed and defined interest rates. Failing to lock in a binding obligation to adhere to the original terms would leave the debts open to quite an attractive speculative purchase on the part of the banks, which would know that we as Government might walk away not only from the management of the loans, but from the protections that were attached to them, in terms of interest rate guarantees.
	If the House fails to put in place those guarantees, we risk creating a huge potential to discredit the student loans system as a whole, because those who enter into those loan agreements need to be able to do so in the belief that what we say the terms of the loan are will indeed be the strictly adhered-to terms of that loan. If people believe that those terms are only the opening gambit and that they could in future face serious increases in the cost of servicing those loans, either they will be saddled with huge debts that they might not be able to service or the prospect of such increases will act as a deterrent against people taking on those loans and accessing the university system in the first place.

John Hayes: Not for the first time in the 20 years in which I have known the hon. Gentleman and exchanged ideas with him, he is making a great deal of sense. He is making a case for including a series of criteria in the Bill that would limit the Government's capacity to jeopardise either the public interest or, as he has so eloquently argued, the interests of those taking out the loans.

Alan Simpson: I am indeed making precisely that case. That is why I am inviting the Minister to give the House an undertaking that precisely those guarantees will be written into the Bill. The issue is not the integrity of the existing Minister, with whom I have no dispute and on whom I cast no doubts; rather, such an undertaking would be a recognition not only that ministerial appointments are, at best, something of a magic roundabout and that people's tenure is limited, but that Governments change. Unless the terms are set out clearly in the Bill, it would be impossible to prevent someone else from intervening in the parliamentary process and, as an act of political whim, completely rewriting the script.

Angela Watkinson: The hon. Gentleman is making some powerful points about guaranteeing the terms and conditions of student loans. Does he agree that currently under-represented groups whom we would wish to attend college—perhaps from low-income families—would be additionally cautious and therefore seek to ensure that they did not take on loans with open-ended conditions and repayments that could escalate to levels that involved them in debt collection?

Alan Simpson: That is an important and serious point. I happen to have grown up on a different planet, where I went to university only because I could do so on a full student grant. Had my family been required to entertain the notion of taking out loans to go to university, they probably would not have done so. However, they certainly would not have entered into any loan agreements that included the prospect of the terms being spun away from them, by being changed in the middle of the repayment period.

Rob Marris: Will my hon. Friend give way?

Alan Simpson: I will happily give way, but I have been trying to finish for the past few minutes!

Rob Marris: Perhaps my hon. Friend has covered this point and I have missed it, but if I take out a loan from bank A, which then sells it to bank B, bank B cannot change the terms of the agreement unless the original agreement with bank A contained within it a provision enabling the creditor—now bank B, formerly bank A—to change those terms. Is my hon. Friend saying that the agreements that individual students have entered into with the Student Loans Company, via the Government, already contain such variation clauses? If there are no such variation clauses within those agreements, his fears will not be realised.

Alan Simpson: That is an important point. My answer is that as I read through the provisions in the Bill, it was not clear to me that such a legally binding lock was in place. If there is any ambiguity in the process, there is nothing wrong in putting those belt-and-braces locks in place—in fact, it would be irresponsible of the House not to do so. Those provisions would include specific arrangements covering variations of the terms of the loan, which would include interest rates.
	Those are the points that I wanted to make. I hope that the Minister will take this opportunity to respond to them.

Bill Rammell: I am more than pleased to respond to this group of amendments, which covers transfer and collection arrangements after sales have been made. Let me start with the comments that my hon. Friend the Member for Nottingham, South (Alan Simpson) made. As a lifelong Tottenham Hotspur supporter who is in a very good mood today, I hope that his team does well this evening and that we meet at Wembley on 24 February.
	My hon. Friend asked me who would seek to purchase the loans. We made it clear throughout the Committee stage that we believe that there will be a keen appetite for the loans in the private sector. The market will bid to purchase loans at a price that represents good value for money. A wide range of investors will be interested in buying the loans, because—we explored this issue at length in Committee—they are a new asset class that will enable investors to diversify their portfolios and meet specific investor needs. If they undertake that course of action, investors will receive the benefit of sustained income over a long period of time from a group of borrowers who, taken as a whole, are considered to be low risk.
	My hon. Friend also raised the issue of changing the terms and conditions—this was more than adequately dealt with in the intervention that my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) made. Let me be explicitly clear: as I said on Second Reading and throughout the Committee stage, there will be no different treatment of borrowers and debtors, whether their debt is owned by the Government or by the private sector. It is, of course, open to any future Government to change the terms and conditions; but they would have to do that equally for the loans that were owned by the Government as for those owned by the private sector, so there is no issue of unequal treatment.
	The hon. Member for Reading, East (Mr. Wilson) started by saying that there was enormous concern across the House on the issue. I have been a Member of the House for only 10 and a half years, but in my experience the presence in the Chamber of representatives on the three Front Benches and six or seven other MPs does not constitute enormous concern. As was demonstrated in Committee, there is a broad consensus on the issues. It is right, however, that we respond to any concerns put forward.
	I fully agree with the intention behind amendment No. 5. As I stated unequivocally throughout the Bill's passage, purchasers of loans will not be able to change the repayment terms. As is the case today, terms and conditions for all loans will be governed by the regulations scrutinised by the House. That is the explicit effect in statute, if the Bill is passed, of clause 4(1).
	The regulations that govern the terms and conditions on the repayment of student loans are made under section 22 of the Teaching and Higher Education Act 1998. In terms of scrutiny, which was one of the issues raised by the hon. Member for Reading, East, those regulations are subject to approval by Parliament under the negative procedure. Any new regulations with which the Government come forward would similarly be subject to such scrutiny. To that extent, amendment No. 5 is unnecessary, and I ask him to withdraw it.
	Amendment No. 6 would include a specific restriction on organisations to which sales can be made. As time goes by, that will be classified as the Northern Rock amendment, and it has much more to do with the Conservative party's irresponsible desire to make political hay out of the current Northern Rock situation than with real concerns about the Bill. The drafting does not make clear precisely how the target for the restriction would be defined. I reiterate that we do not expect that any financial institution would want to own the loans itself, as was made abundantly clear throughout Committee. It is therefore highly likely that the loans would be sold to a special purpose company and that ownership would stay with that organisation. Therefore, it is not straightforward to see how the restriction might be applied.
	Another difficulty is that the restriction would apply to onward sales as much as to initial sales, by virtue of clause 3(2). Government cannot exert substantial control over onward sales. If the proposed restriction on onward sales were included in a sales contract, the transaction would not constitute a sale. Under the current Office for National Statistics rules for classifying public and private debt, we would not see a transference of risk from public to private sector, and a capital receipt would not be available for reinvestment across Government public spending.
	On amendment No. 11, let me respond to the hon. Gentleman's comments about the Red Book estimate of £6.3 billion of income from the sale of student loans over the coming three-year comprehensive spending review period. As I was at pains to make clear throughout Committee, that figure is not set in tablets of stone. If market conditions do not allow for it—although I believe that they will—and we are not able to demonstrate value for money, the sale would not go ahead.

John Hayes: As Members on both sides of the House have said, there is no doubt about the Minister's integrity. We know, however, that the Government's estimates are set in stone. The Treasury has made it clear in the comprehensive spending review that it anticipates that income. If the sale does not go ahead, where will it find the money from?

Bill Rammell: I urge the hon. Gentleman to look to his own house before he casts stones and implies that there are black holes in the Government's spending plan. The income receipts in the Treasury Red Book are always based on estimates. As I made clear in Committee, if the environment is not appropriate and we cannot demonstrate value for money, the sale will not go ahead.
	Amendment No. 11 refers to the overall value-for-money framework. All transactions will be subject to a rigorous value-for-money assessment. I fully agree with the amendment's description of the key features of that assessment; it would be odd and perverse if I did not, as I was at pains to read those very words into the record on Second Reading. As I have clearly set out the principles for the record, the amendment is unnecessary.
	I note that hon. Members heeded my remarks at earlier stages that we could not sensibly include in the Bill any details of the Government's assessment of what price would constitute good value for money. That would reveal our hand in advance of the competitive sale of the loans. Just as we cannot put those details in the Bill, we should not try to translate the principles of our value-for-money approach into a set of statutory tests, as is proposed in amendment No. 11. Principles are not precise enough to serve that function, and we would not want to establish an exclusive list of such tests at the start of a long-term programme of sales.
	We will want, rightly, to build on the experience of sales transactions and, for example, any evaluations by the National Audit Office. The value-for-money judgment on each transaction will, however, be open to parliamentary scrutiny in the usual way. I am more than happy to put it on the record that the Government will report to the House after each and every sales transaction. No doubt the National Audit Office will also report to the Public Accounts Committee on the sales programmes. A robust value-for-money framework is in place, along with adequate scrutiny procedures to ensure that it works.

John McDonnell: This point might relate to value for money, but I want to take the Minister back to his helpful response to the earlier point about the assurances required on future control of the loan regime. He referred to clause 4(1), which refers to the loan regulations. My understanding of the loan regulations is that they will cover the overall regime, the basis on which the loans are developed, the percentage rate of charge, and perhaps the value-for-money issues. In relation to clause 4(4), he assured the House that any changes in the regime would be subject to the negative procedure. Will he provide some clarity—not necessarily today, although he might get inspiration from elsewhere during the debate, or he might write to me—on clause 4(4):
	"Amendments of loan regulations may have effect in respect of transferred loans"?
	How will those loan regulations be scrutinised, and perhaps amended, by the House? Will they be subject to the affirmative or negative procedure? In what way will they come before the House? They will establish the overall regime in terms of the nature of the loans and perhaps in terms of value for money.

Bill Rammell: Let me state this for the record; then if I need to follow it up with statements to other hon. Members, I will do so. The loan regulations that we establish through the negative resolution procedure in the House will apply equally to debt owned by the public sector and by the private sector. That is the fundamental reassurance: the graduate repaying their student loan will notice no difference whatever in the terms and conditions involved. Indeed, apart from receiving a letter from the Student Loans Company when the sale initially takes place, they are unlikely to notice any difference as, according to the requirements that we have set out, we will expect the SLC to continue to collect on behalf of the owner of the debt, whether that is the Government or a private sector owner.
	The value-for-money judgment on each transaction will, of course, be open to parliamentary scrutiny. Amendment No. 7 refers specifically to the Student Loans Company. Its effect would be that only the SLC and Her Majesty's Revenue and Customs would be able to be involved in collection activity on sold loans. Amendment No. 8 seeks to ensure that only the Secretary of State or the SLC could make payment of sums due to a loan purchaser—whether as principal, interest or penalty—to that purchaser. In so far as the hon. Gentleman's intention is to ensure that the SLC continues to fulfil its pivotal functions for all loans, I fully agree with the sentiment that gave rise to the amendment. The Government fully intend that the SLC will remain the administrator for all loans, whether sold or retained. The Bill, as drafted, allows the Government to insist that purchasers administer loans in this way through the contracts that we enter into with them.
	The SLC is a private limited company, but not a statutory body. There are several technical reasons why it would be problematic to name on the face of the Bill an organisation of this sort. The drafting would have to cater for the possibility of the company's ceasing to exist—even though that is an unlikely eventuality—and so would have to provide a wider definition rather than simply referring to the SLC. For that reason, I do not believe that the amendment works.

Angela Watkinson: Are we to understand from what the Minister is saying about the collection of defaulted loans that there will never be any involvement by unregulated bailiff companies? There is a lot of anecdotal evidence at the moment about unprofessional and bad behaviour. If the collection of unpaid loans is not regulated, there could be unpleasant consequences for young people who are simply struggling to pay their bills.

Bill Rammell: There are clear procedures and guidelines in respect of the powers available to the Student Loans Company to follow up and search out debt that has not been repaid. Those restrictions will apply to the SLC, whether it is administering that debt on behalf of the public sector or the private sector.
	The current drafting will also enable us to cater for any future overall change in the administration of the student loans system. Although no such change is envisaged, we must bear it in mind that the Bill will enable a long-term programme. I am happy to emphasise again for the record that it is the Government's firm intention for the SLC to continue in its current role for all loans. I hope that, with those reassurances, the hon. Member for Reading, East will feel able to withdraw his amendment.

Robert Wilson: We have had a fairly brief, but good, debate. Some of the contributions, including that of the hon. Member for Nottingham, South (Alan Simpson), were extremely good. I listened carefully to what the Minister said in response to my amendments, and I appreciate the patient way in which he has dealt with the many questions on the Bill from both sides of the House throughout this whole process. I am happy to accept his assurances on amendment No. 5. It appears that there will be sufficient parliamentary scrutiny, which was a key factor in my tabling that amendment. I am also happy to accept his assurances on amendments Nos. 6 and 8—I hope that I have got those numbers right.
	I do not feel, however, that the Minister has made a compelling case against our attempt to improve the Bill in other respects. On amendment No. 7, I am not reassured that, 10 or 20 years down the track, another agent or person acting on behalf of a loan purchaser will give sufficient reassurance to those who have taken out loans. His response on amendment No. 11 was also insufficiently robust. I listened carefully to what the Minister said about it and although his intentions may be noble—I do not doubt his integrity for a second—it is not only a matter of his viewpoint, as other Ministers will succeed him. As the hon. Member for Nottingham, South said, the ministerial merry-go-round does indeed go round and round, so where the Minister sits today may not be where he sits in a month's or a year's time. It is therefore important to have some guarantee built into the Bill.
	The Minister also failed to reassure me about the Treasury's power in this respect. If £6.3 billion is bound up in the comprehensive spending review at a time when black clouds are gathering and the income from taxation may not be as high as the Chancellor hopes for, and given the increase in the power and influence of the Treasury in recent years, it may well push very hard to raise money through the sale of the loans. That may not offer the best value for money outcome for the country. I am not therefore going to press amendments Nos. 5, 6 or 8, but with your permission, Madam Deputy Speaker, I intend to divide the House on amendments Nos. 7 and 11.

Madam Deputy Speaker: Order. The only amendment before the House at the moment is amendment No. 5.

Robert Wilson: I beg to ask leave to withdraw the amendment.
	 Amendment, by leave, withdrawn.
	 Amendment proposed: No. 11, page 2, line 13, at end insert—
	'(8) In advance of entering into transfer arrangements the Secretary of State shall—
	(a) examine the prevailing market conditions and ensure that a competitive market for the loans has been generated;
	(b) provide the market with full information about the loan book in order that the assets can be efficiently valued;
	(c) ensure that there has been a genuine transfer of risk from the public accounts to the private sector; and
	(d) assess the proceeds that look likely to be achieved in the transaction, using full and clear market information and a comparison with keeping the loans on the Government books, in terms of both likely income flows and levels of risk.
	(9) The Secretary of State shall make a written statement on expenditure incurred in connection with each transfer arrangement.'.— [Mr. Rob Wilson.]

Question put, That the amendment be made:—
	 The House divided: Ayes 213, Noes 288.

Question accordingly negatived.

Clause 3
	 — 
	Onward sales

John McDonnell: I beg to move amendment No. 4, page 3, line 22, leave out 'may' and insert 'shall'.

Madam Deputy Speaker: With this it will be convenient to discuss the following amendments:
	No. 9, page 3, line 24, at end insert—
	'(6A) Transfer arrangements shall—'.
	No. 10, page 3, line 29, at end insert—
	'(d) include provision to prohibit transfers to another person outside the jurisdiction of the Secretary of State;
	(e) prohibit the making of further transfer arrangements under which rights in respect of student loans are transferred to multiple purchasers.'.

John McDonnell: Amendment No. 4 stands in my name, and I see that amendment No. 9 is virtually the same as it—it would certainly have the same effect. I was not privileged to be a member of the Public Bill Committee, so— [Interruption.]

Madam Deputy Speaker: Order. Would Members who are leaving the Chamber please do so as quickly and as quietly as they can?

John McDonnell: When I get to my feet I usually speed the rush out of the Chamber, so it was surprising that those hon. Members delayed.
	I was not a member of the Public Bill Committee, so I come to this debate as a humble seeker of the truth. I want to focus on the issue of onward sales. During the debate we have received helpful assurances that provide some security, in particular for people who have taken out a student loan but also for the Government in respect of the long-term future of student loans. However, the issue of onward sales remains a matter of concern and does not yet offer us the security that is required.
	I welcome any correction if I have got this wrong, but I understand that the process from here on in is that a financial adviser will be appointed—I am not sure whether that has happened yet, but the last indication was that it would be Rothschild—a special purpose vehicle will be established, the sale will take place and the Government will pocket a sum. The loans will be protected, as my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) has mentioned, by the contract on the loan itself and by the assurances given today by the Minister that the regime will be protected by, at least, a report to the House and the use of the negative procedure of the House. That still means that the Government will be able to vary things at a future date—I hope that such a variance will be beneficial when the rate applied at the moment is examined—and they still have the opportunity to go in a different direction. The argument is that this system will offer value for money via the terms of the sale and the contract that will then be issued by the purchaser.
	Our anxieties are about onward sales. We live in a complex financial market and financial system, where we experience a range of what can only be described as "exotic financial instruments". They are complex, and in being so, they are increasingly precarious. So, a difficulty over regulation has emerged, as a result of which market conditions have become exceptionally difficult. In some instances, it would be difficult to envisage a purchaser of the loans, given the current market instability.
	I do not want to dwell too much on Northern Rock, but the Bank of England, the Financial Services Authority and the Government charter have all been unable to control Northern Rock and to ensure predictable certainty. That has thrown up a number of regulation issues that the Government have responded to by undertaking reviews that may lead to reform. In that uncertain climate, the Minister rightly made it clear on Second Reading and in Committee that there was a perceived need for protection for all parties in the future. That protection certainly needs to be given to those who have taken out loans. For most people, a student loan will probably be one of the biggest loans that they will take out in their lives alongside their mortgage, their car loan—and, if membership rates keep increasing, their loan for membership of the Labour party.
	It is vital that we secure the future financial arrangements beyond the initial sale. The positive decision on the initial sale will be made by the Secretary of State. Amendment No. 4 would ensure that an onward sale would require the same level of ministerial consent. The amendment would mean that the Secretary of State's consent "shall" rather than "may" be required. If it were accepted, the Bill would require that "transfer arrangements shall", rather than may,
	"prohibit the making of further transfer arrangements without the Secretary of State's consent".
	In Committee, the Minister said in response to that suggestion that it was doubtful whether there would be a sell-on given the experience in the past decade of the first tranche of sales. I believe that the world has changed, and it is changing rapidly. New financial mechanisms are evolving almost daily to enable swifter sell-ons in a variety of forms.
	The Minister also said that there was no need to require the Secretary of State's consent because clause 3(6)(b) and (c) would provide satisfactory protection. However, it is uncertain whether those paragraphs would require the involvement of the Secretary of State. The Bill states:
	"Transfer arrangements may...require further transfer arrangements to be effected by way of novation or other arrangements"
	or they may
	"include provision by virtue of which the Secretary of State is automatically a party".
	The word used is still "may", and so the Secretary of State's involvement is still discretionary.
	The crux of the matter emerged in Committee. The problem with the inclusion of the word "shall" rather than "may"—that is, a requirement for the Secretary of State's consent—is a result of the Treasury accountancy rules. In Committee, the Minister said that the inclusion of the word "shall" would prohibit the onward sale of loans as the risk would not be transferred from the public to the private sector so the result would not be full privatisation. The argument is that the word "shall" would mean that income received as a result of the sale would appear on the Treasury's books.
	In Committee, that discussion prompted a debate about motivation. What is the motivation for the sale? Is it to raise funds? Yes. Is it to increase value for money in the management of the funds or, as my hon. Friend the Member for Wolverhampton, South-West asked in Committee, is it ideological—that is, political?
	It is clear that funds will be raised, but the anxiety is that they will not be hypothecated—that is, that they will not be dedicated to funding higher education, for example, or to increasing maintenance grants for students. The National Union of Students has advised us today that the bursary schemes are failing to assist poorer students, and that there is concern that any funds raised will not be used in education.
	If the Government's motivation is to achieve value for money—and my hon. Friend the Member for Nottingham, South (Alan Simpson) has explained some of the costs incurred in the past—it is doubtful that the measure will succeed. Many people believe that the public sector can manage these matters better than the private sector, and that any risks that might exist would be discounted in the sale price. That leads me to doubt that value for money is the Government's aim, and to believe that the motivation is ideological and political.
	I believe that the Prime Minister and the Chancellor want to get the money involved off the Treasury books and to keep public sector debt below 40 per cent. of national income. The Government's refusal to use the word "shall" rather than "may" shows that they believe that requiring the Secretary of State's consent to the onward sale of the loans would undermine privatisation and ensure that income from the sale would appear on the Government's books.
	My contention is that the Bill undermines the future protection of the Government, the taxpayer and those who have taken out student loans. It is based on an ideological and political desire not to offend against Treasury rules and to ensure that borrowing does not go above 40 per cent. of national income.
	However, such rules are not unbreakable: as we have seen with Northern Rock, they can go out of the window when there is a need to protect people who have invested in, or borrowed from, a particular institution. Amendment No. 4 would ensure that the same protection that has been extended to Northern Rock's borrowers and savers is extended to the Government, the taxpayer and those with student loans if those loans are sold on.
	In part, the amendment reflects the debate that took place in Committee. I hope that the Minister can give us some further assurance about the onward sale of student loans, as the taxpayer and those who have taken out such loans need more security in that regard.

John Hayes: The amendments are simple but necessary. They would clarify the Government's position, defend the interests of those with debt, and maintain rigorous and appropriate accountability.
	I am delighted to follow the hon. Member for Hayes and Harlington (John McDonnell), whose amendment No. 4 is very similar to the Opposition's amendment No. 10. There is an anxiety among hon. Members of all parties to ensure that the interests of the taxpayer and of those who have taken on a debt are protected. We can achieve that by making the wording of the Bill as tight as possible, even though we accept the Minister's good will and good intentions. Indeed, I should like to take this opportunity to say that he has handled this Bill with his customary professionalism and generosity.
	Amendments Nos. 4 and 9 would require the Secretary of State to be party to onward sale arrangements, and they would also ensure that he was automatically a party to further transfer arrangements. On Second Reading and in Committee, concerns were expressed by hon. Members of all parties about the resale of the debt. I shall say a little more about that, as both amendments apply specifically to those circumstances.
	Clause 3 gives the purchaser of a loan the right to sell it on to another buyer, subject to any limits on that right specified in the terms of the original sales contract with the Secretary of State. Although those who purchased the debt have a clear right to sell on the loans—one suspects they would not be able to buy them in the first instance unless that right is made clear—I think the whole House will agree that it is important that we have appropriate safeguards in place.
	There are legitimate concerns about collateralised debt, and they were raised eloquently on Second Reading. History has taught us that loans can easily be repackaged and, in the end, involve a large number of different purchasers, some of whom, if they are known at all, could be outside the jurisdiction of the Secretary of State. Various scenarios were described in earlier considerations of the Bill. They include the horrific possibility of a loan or part of a loan book being purchased by an organisation underwritten by Government, by an offshore company or by an organisation in a distant place that would be outside the jurisdiction of the Secretary of State and therefore not subject to the important checks and balances that are to be written into the initial sale as part of the sales contract.

Rob Marris: Will the hon. Gentleman give way?

John Hayes: I am delighted to give way to the hon. Gentleman, who spoke so eloquently on Second Reading and in Committee.

Rob Marris: I am grateful to the hon. Gentleman, who is presenting his case with his usual aplomb, as did the Minister.
	Amendment No. 10 would introduce a new subsection (6) of paragraph (d) in clause 3 that would
	"include provision to prohibit transfers to another person outside the jurisdiction of the Secretary of State".
	Can the hon. Gentleman say a little more about what the phrase "outside the jurisdiction" means in that context? In particular, is he seeking to address the fear that I expressed in Committee that we could have another Mapeley-type situation and that the debts could end up offshore? Or is he looking at a wider interpretation of the phrase?

John Hayes: I will come to amendment No. 10 in a moment, and I will endeavour to address that point. As the hon. Gentleman knows, I have already mentioned the risk of offshore organisations buying part of the debt. The picture that we fear may emerge is of the book being broken up into small parts. That is normal practice when purchasing and reselling debt. He is right to point out, as he has done before, that control is likely to be increasingly difficult to maintain as that process occurs. However, as I said, I will deal specifically with amendment No. 10 a little later.
	I do not want to dwell on the Government's continuing misfortunes; this is not the time or place to do that. Although the misfortunes have been profound and have caused real fears and difficulties across the country and have hurt some of the most vulnerable people represented by Members of the House, it is not appropriate to dwell on them here. However, it is certainly true that there are concerns about the leakage of data. Given the number of actors likely to be involved, there is surely an increased likelihood of a sensitive data leak. Unless strict safeguards are implemented, the audit trail could become complicated and possibly unreliable.
	In Committee, the Minister explained that "may" rather than "shall"—this is the nub of the amendments that I and the hon. Member for Hayes and Harlington have tabled—was used in clause 3 in respect of the Secretary of State's involvement in transfer arrangements because, for accounting purposes, the debt would otherwise not be considered to have left the Government's books. Essentially, he argued that the word "may" appeared in the Bill for administrative reasons rather than as a matter of principle. He conceded that the safeguards that I have called for were important, but felt that, as the principal motive for the Bill was the transfer of risk from the public to the private sector, it was important in accounting terms that the debt should be seen to have shifted.
	There are those cynics—I am not saying I am one of them—who think that the principal purpose of the Bill is to get some dosh to fund the Government's plans. There is nothing wrong with that, but there are those who feel that that might take priority over other considerations, such as the welfare of debtors or the public interest, as my hon. Friend the Member for Reading, East (Mr. Wilson) pointed out. I will not add my voice to those that put forward that cynical analysis, except to say that I have some sympathy with those who expressed a sceptical view about the Government's intentions.
	I do not mean to insult the hon. Member for Hayes and Harlington in any way, but he missed a critical point: when the Minister for Lifelong Learning, Further and Higher Education clarified the position, he made it clear that the stipulation relating to accounting practices that I mentioned applied only to clause 3(6)(a), which refers to arrangements that
	"prohibit the making of further transfer arrangements without the Secretary of State's consent".
	For the sake of clarity, let me quote the Minister's precise words:
	"Were we to insert the word 'shall' in respect of paragraph (a) so that in all circumstances we would have to prohibit the making of further transfer arrangements without the consent of the Secretary of State, it would contravene the rules of classification and it could not be classified as a transfer from public to private sector debt."
	In respect of paragraphs (b) and (c), it is therefore quite clear that there is no administrative bar to changing the Bill.
	For the record, when I asked the Minister why paragraphs (b) and (c) were grouped with (a), he said that he was
	"always happy to consider constructive proposals." ——[Official Report, Sale of Student Loans Public Bill Committee, 4 December 2007; c. 62-63 .]
	Well, amendment no. 9, which is in my name and the names of my hon. Friends, is just such a constructive proposal. It would separate paragraph (a) from paragraphs (b) and (c). It is clear, at least from what the Minister said during the Bill's earlier stages, that we could satisfy accounting rules while building in the additional safeguard that has been called for so eloquently by the hon. Member for Hayes and Harlington, by other Members on both sides of the Chamber and by the official Opposition. Our amendment is constructive as it would ensure ministerial involvement in onward sales, and would reassure the House and all those with student debts. It is on a matter of public interest, and we all seek to ensure that the Bill is in the public interest.
	Having heard the intervention of the hon. Member for Wolverhampton, South-West (Rob Marris), I turn now to amendment No. 10, which would prohibit onward sale outside the jurisdiction of the Secretary of State. It would ensure that when student loans were broken up, creating the real doubts that I mentioned, the public's or debtors' interests were not jeopardised. I took on board his remarks about offshore companies; they certainly would fall into the category I described, but there are other circumstances in which the resale of the book might jeopardise debtors' interests or the public interest. He is an eminent lawyer, so he might care to contribute on the subject, either now or later. I see that he is nodding, so we can expect some sagacious remarks from him on the subject.
	Through amendment No. 10, I hope to express my anxiety about ensuring that the Minister's assurances on the Secretary of State's powers to protect interests at a later stage of the process are meaningful. The amendment is very much in the spirit of what the hon. Member for Wolverhampton, South-West and I said in the Bill's earlier stages. I have no doubt about the intentions of the Secretary of State and the Minister, but if the debt were sold to a place—I use the term in the broadest sense—outside the Secretary of State's jurisdiction, it would be hard to guarantee that protection. Amendment No. 10 would therefore be a useful addition to the Bill, and would increase popular confidence in the Bill's efficacy.
	My hon. Friend the Member for Daventry (Mr. Boswell), who always comments on these matters with both experience and insight, quoted the example of a hypothetical Lithuanian bank securing a package of loans. I made it clear then that I have nothing against Lithuania, but one can see what he was getting at. There would be real worries among existing and potential debtors if they thought that the loan book would be broken up and spread across the globe.
	I hope that we might divide on amendment No. 9. As the hon. Member for Hayes and Harlington led on this group of amendments, it is his privilege to make his own decision, but that is ours.

Rob Marris: On at least three occasions in the Public Bill Committee, the Minister was clear about "shall" and "may" and the Government's position on that. I shall quote from column 62 of our deliberations in Committee on 4 December, where my hon. Friend said:
	"My clear understanding is that were we to insert the word 'shall' in clause 3(6)(a), that would make us unable to classify the debt as a transfer from the public to the private sector. However, there are other protections available to us in clause 3(6)(b) and (c) to enable us, through the contract, to protect the interests of the graduate."
	I shall break that down into two parts.
	To me, the easier and less intricate part, if I may put it that way, is in the second half of the quote that I just read out, where the Minister, as he had earlier in that debate in Committee, referred to "other protections". The other protections in clause 3(6)(b) and (c) in the Bill as drafted—in contradistinction to the Bill as it would be, were the amendments to pass—or, as the Minister also described them, the
	"other tools at our disposal"—[ Official Report,  Sale of Student Loans  Public Bill Committee , 4 December 2007; c. 61-62.]
	come under the permissive rather than mandatory rubric of the first line of clause 6, which contains the phrase
	"transfer arrangements may".
	The permissive word "may", rather than the mandatory word "shall", covers (a), (b) and (c), so I should like a little clarification from my hon. Friend the Minister as to how those other protections would not be potentially weakened, just as the protection in clause 3(6)(a) is arguably weakened, because they are all under the umbrella of "may" rather than "shall".
	To me, the more intricate point, which unfortunately leads us to another "shall" and "may", is the clarification that my hon. Friend issued to members of the Committee, sending them a copy of the letter that he wrote on 12 December to the Chair of the Committee, my hon. Friend the Member for Aberdeen, South (Miss Begg), for the benefit of all members of the Committee. He stated on page 2 of his letter:
	"The most important factors in deciding the classification are whether there has been a real transfer of risk and control to the private sector. Under the current classification rules, using Clause 3(6)(a) would provide evidence that the Secretary of State had retained an element of control over the loans in the event of onward sale, and would affect ONS's decision to classify the loans as having been sold."
	I want to probe that a little further with my hon. Friend, which I shall do in a moment by way of an example. It is not clear to me whether the word "would" in the phrase
	"would affect ONS's decision to classify the loans as having been sold"
	is a permissive or a mandatory word—that is, whether the ONS definitely would say, "'Shall' means that the Government have control, therefore the loans do not go off the public books" or whether the ONS might so classify it if the House decided to use the word "shall" rather than "may" in clause 3(6). The wording in the Minister's letter relates to retaining an element of control.
	My partner and I have lived in the same house for 23 years—bear with me on this for a moment, if you would, Madam Deputy Speaker. The house was built in about 1888. We bought it from another married couple, who had bought it from the Roman Catholic archdiocese of Birmingham. It had inherited the house from somebody who had owned it for a number of years; I know nothing about the chain leading back to 1888.
	In the deeds, there is a restriction on brewing beer for commercial purposes. That is quite a common restriction for terraced houses built in the midlands in the 19th century; I saw it several times during the little bit of conveyancing that I did in my former career. Whoever has the benefit of that restrictive covenant will be the heirs and assigns of whoever imposed that covenant—possibly the builder—in about 1888. That family retains an element of control over how my wife and I can or cannot use our property. However, it would be clear to most lay people—and, I think, to most lawyers, although I am not much of a conveyancer—that the clear ownership of the property had been outwith that family for 120 years. So when I consider the student loan book that might be transferred, it seems to me that, were the word "shall" to be used in clause 3(6), the Office for National Statistics—I do not know all the rules—might not classify this as a prohibition on saying that the debt was off the books.

Shona McIsaac: My hon. Friend is right; such restrictive covenants exist throughout the country. In the fishing areas where I come from, they restrict such activities as fish curing. Many of the properties involved are leasehold, which further complicates things.

Rob Marris: My hon. Friend is right, although I do not want to get into leaseholds, which would further complicate the matter. In a long lease, ownership of the land has not transferred, but let us leave that aside. My hon. Friend is right indirectly to get me to say what I have not said hitherto: our property is freehold. There is a restriction on our use of it. Someone else has an element of control, to use the Minister's words, as to what we do with the property. However, everyone would say that we own the property and that the property has been transferred into our names.

Madam Deputy Speaker: I appreciate the example that the hon. Gentleman has given, but we must not stray too far down that route and lose ourselves.

John McDonnell: I assure my hon. Friend that I desperately do not want to get involved in a discussion of my lease.
	I should like to make a point to the Minister through my hon. Friend. As the Minister explained in Committee, the rules that are defined relate to control. If a controlling interest of some sort is involved, the loans are still on the Government's books and there is not a transfer of risk and a privatisation in that sense.
	There must be a qualitative judgment; I think that my hon. Friend was getting to that. The Opposition have tabled a clever amendment, which, based on the Minister's wording originally in Committee, relates to clause 3(6)(a)—that is the qualitative judgment made on control. However, (b) and (c) are therefore not judged qualitatively as having sufficient control and therefore offending against Treasury rules.
	The clear issue for many of us, though, is that there should be control. The ingenious Opposition amendment falls between the two stools—there either is or is not control. In my view and that of many others, if there is no control, we will not have sufficient power over the future. If there is control, the issue falls foul, like "shall" in regard to subsection 3(a); it would fall under the guidance of the ONS, as it would be classified as still being under the control of the Government and therefore, under Treasury rules, part of the Government's expenditure.

Rob Marris: I will be interested to hear what my hon. Friend the Minister says as to whether severing paragraphs (b) and (c) and putting them under a mandatory "shall", but retaining the permissive "may" covering paragraph (a), is sufficient to address any concerns of the ONS or the political concerns of hon. Members.

Stephen Williams: It sounds as though the hon. Gentleman is describing a Quaker clause, which is common in my constituency, whereby there are no pubs on a particular swathe of land because of restrictions put on its sale. He is a lawyer and I am an accountant. He seems to be confusing contract law of restrictive covenants with accountancy law on what can be kept on-balance sheet, which I think is what the Minister is getting at. Does he recognise that he might be going down the wrong avenue?

Rob Marris: I might be; that is one of the things I am attempting to probe with the Minister. Ultimately, of course, accountancy law is still law.

John Hayes: As ever, the hon. Gentleman is making an interesting case. The point made by the hon. Member for Hayes and Harlington (John McDonnell) seems to be the pertinent one. That is why I favour amendment No. 9 over amendment No. 4. If the Minister tells us that paragraphs (b) and (c) cannot be prefixed by "shall", he will contradict what he said during earlier consideration of the Bill when he explicitly talked about paragraph (a), which is supported by the correspondence to which the hon. Member for Wolverhampton, South-West (Rob Marris) referred.

Rob Marris: As always with this lucid Minister, it will become clear what can and cannot be done and what the consequences of certain courses of action might be. However, I would like him to clarify whether the use of "shall", as in amendment No. 4, would definitely lead to the ONS making a ruling that the student loan book, when sold, had not moved off the Government's books, or might lead to it making such a ruling.

Stephen Williams: We are having an interesting debate on the meaning of the word "shall" and whether it has a legal or an accounting effect. We will have to wait to hear what the Minister says. I hope that he has a corporate lawyer at hand with his officials to slip in some definitive advice. In privatisations, there was often provision for a golden share, and it seems the hon. Member for South Holland and The Deepings (Mr. Hayes) and the hon. Member for Hayes and Harlington (John McDonnell) are proposing a golden clause in the contract of sale. That might be a helpful analogy, but we need to wait for what the Minister says, based on the legal advice that I am sure he is in the course of receiving.
	Amendment No. 10, tabled by the hon. Member for South Holland and The Deepings, would prohibit transfers to another person outside the jurisdiction of the Secretary of State. When I read the amendment, I wondered what that meant. The hon. Gentleman suggested, as did Labour Members, that it might mean a break-up of the loan book, and perhaps sales offshore as well. Is there a contradiction between that amendment and amendment No. 11, which sought a full market test for the sale of the loan book, and which I agreed with? If certain people are excluded just because they happen to be outside the jurisdiction of the Secretary of State or of our banking laws or any other laws, would that undermine the concept of value for the taxpayer that the Conservatives sought to achieve?

John Hayes: To clarify for the benefit of the House and the hon. Gentleman, we clearly need to ensure value for money. I am not a lawyer or an accountant, but I was a business man. Buying and selling and getting value for money in doing so does not mean that one buys and sells to absolutely anyone, regardless of the consequences.

Stephen Williams: I thank the hon. Gentleman for that intervention, but I am not sure whether it clarifies the purpose of his amendment. As a business man, I am sure that he relied on the advice of both lawyers and accountants to achieve good value for his business.
	I hope that we shall get some clarification as to the purpose of the amendment. Is it to prevent sales of the loan book offshore? I am not sure that I agree with that or that I see the dangers implied, although I had some sympathy with the statement that there may be data protection issues for graduates if the loans were broken up. On the other hand, as long as the conduit for their payments and for advice and correspondence remained the Student Loans Company, which was the subject of amendment No. 7, that protection might remain in place. Earlier, the Minister said that that was the case, and I assume that is why amendment No. 7 was not pressed to a Division. Again, clarification would be welcome.

John Hayes: There are other issues, such as debt collection, that we have debated previously, and they may be debated again when the Bill goes to the other House. There are all sorts of things relating to who handles the debt that might affect the welfare and circumstances of the debtor. Ownership is important in those terms as well.

Stephen Williams: I thank the hon. Gentleman for that clarification. I am drawing my remarks to a close, and I have to wait for clarification from the Minister as to the definition of "shall".

Rob Marris: The hon. Gentleman will correct me if I am wrong, but I understood him to say that he was not overly concerned about offshoring and was not sure what the concerns were. My concerns relate not only to the data protection issues to which the hon. Gentleman referred, but to the potential loss of tax revenue to the United Kingdom. With Mapeley, the outcome is that a load of Treasury buildings are now owned by a company in Bermuda that does not pay UK taxes. I am worried that something similar will happen in this case. That would mean a loss of revenue from profits made by a financial institution offshore—by which I mean outside the European Union—that is not getting taxed. We lose.

Stephen Williams: I thank the hon. Gentleman for that intervention. The purpose of my remarks was to get clarification of the amendments' meaning. The hon. Gentleman has participated in the scrutiny of many Finance Bills, so he will know that such transactions could well be the subject of anti-avoidance rules—or they certainly should be. The transaction in question happened several years ago. A Finance Bill is probably the correct place to ensure that an abuse of the sale of a Government asset does not take place. None the less, I was only seeking clarification and I look forward to hearing what the Minister has to say.

Alan Simpson: It is difficult for someone who is not a lawyer or an accountant to speak in this part of the debate. For the record, I would like to make it clear that I am in favour of amendment No. 4 in principle, and in favour of amendments Nos. 9 and 10 and the strengthening of protection that is built into the Bill. It is perfectly legitimate to seek to include protections against the breaking up of the loans package, the transfer of loans outside the jurisdiction of the Secretary of State, or multiple purchases.
	Northern Rock has been mentioned. Experience of the financial collapse in the United States has made us suddenly aware of the complex world of debt sales in which packages of debts are broken up. Good debt is mixed with bad debt, and when the system collapses, all debt goes down the pan. The question for the House is how do we protect those who have taken out debts—people who would be exposed if everything did go pear-shaped? That is a perfectly legitimate question. My difficulty is with the legal significance of the words "shall" and "may", and whether it makes any difference to the transfer of undertaking if a change is made in the opening line of clause 3(6), or between subsection (6)(a) and (b). I ask the Secretary of State to clarify that.

Rob Marris: He is not Secretary of State yet.

Alan Simpson: I mean the Minister.
	During earlier exchanges, I thought that I was clear about the matter when the Minister's comments in Committee were read out. In the light of those comments, amendments Nos. 9 and 10 appeared appropriate, as they would give precisely the sort of protection that the House sought, without compromising Treasury rules about what amounts to a transfer of undertakings.
	In principle, I oppose the sale of student debt—full stop.

John McDonnell: I should like to define my position because I do not want my hon. Friend to misunderstand. I wish to replace "may" with "shall" because I want future sales to take place by way of the Secretary of State's consent. Otherwise, there is no long-term assurance or security. I recognise the ingenuity of the Opposition amendments. If they gave us that control, it would satisfy me but fall foul of Treasury rules. They therefore fall between two stools. I humbly say that my amendment is simpler and clearer and that the Government should accede to it. If they did, we would all get the security that we want.

Alan Simpson: I agree with my hon. Friend but I am not sure whether the technical argument is that the amendment would preclude the whole process happening. Some of us may argue that that would be no bad thing, but I am trying to explore the next level of protection.
	It is almost as if we are in a Catch-22 position. Those who have read the novel will recall a character called Major Major, whom one could get in to see only when he was out. If he was in, he was occupied, but if he was out, people were free to go and discuss whatever they liked with him. If the Minister says that including "shall" at any stage would compromise the transfer, and Treasury rules, we are embarking on a process that cannot offer any guarantees of protection in the new world of risk in which we are being invited to make rules. It leaves the process extraordinarily dubious on moral and practical grounds.
	If we cannot build in the protections, we should not embark on a process that increases, rather than reduces, the risk of exposure. My preference is for amendment No. 4, which grants the "shall" protection to the whole clause. However, if the word "shall" were inserted after subsection (6)(a), would the transfer remain legal?

Bill Rammell: The debate is important. First, let me deal with the comments of the hon. Members for Bristol, West (Stephen Williams) and for South Holland and The Deepings (Mr. Hayes) about data security. The subject was debated at length in Committee, but, given that the concern has been raised again, it is important for the record to make it clear that there have been no breaches of data protection protocols in student loan administration. We are certain that no data have gone missing. Personal data are exchanged between the Student Loans Company and owners of sold, mortgage-style loans electronically, using a secure virtual private network or VPN. That VPN is facilitated using an internet protocol secure encrypted tunnel. As hon. Members who take an interest in such issues know, that method of data sharing is considered robust by industry standards.
	In future, as we plan to require purchasers of income-contingent repayment loans to use the SLC to administer and enforce the sold loans, loan account data will not need to be transferred to the purchasers for day-to-day purposes. In the event of purchasers requiring access to data—for audit purposes, for example, as was mentioned in Committee—the method of data transfer would again be secure and encrypted. I hope that that provides the reassurance that was sought.
	The intention of the amendments in the group is to ensure that borrowers continue to be protected in the event of the onward sale of student loans. I genuinely share hon. Members' determination to ensure that the protection for borrowers that we put in place must still hold good after any onward sale—were I not assured of that, I would not be putting forward these arguments today—so that the graduate can continue to experience no difference in treatment.
	Let me turn to the points that my hon. Friend the Member for Hayes and Harlington (John McDonnell) raised. As I made clear in Committee, the motivation for the legislation is not ideological; rather, the Bill is about the transfer of risk between the public and the private sector. It is about securing for the public sector—for the Government and the taxpayer—greater certainty about the income that we get from loans. That will generate a receipt that can be used for a variety of public spending purposes.
	I should like also to address my hon. Friend's comments about student bursaries. The student finance system cannot, in any shape or form, be described as not working, especially if we bear it in mind that applications for university this year are up in England by more than 6 per cent. and that the proportion of students from lower socio-economic groups applying is up too.

John McDonnell: We can talk about bursaries elsewhere, but the information that we have today is that 20 per cent. of bursaries in the Russell group of universities are not being used. That needs to be investigated, because those resources could be used to bring poorer students into higher education.

Bill Rammell: I certainly agree that all institutions need to communicate and market their bursary systems effectively. I urge my hon. Friend to study the Office for Fair Access report in detail, because it does not quite say what some pieces in the press suggest it does; rather, it says that the bursary system is working effectively. However, we are conscious of the need to ensure that the student financial support system is as effective as possible. I hope that my hon. Friend will support the changes that we announced to the student financial support system, starting from this September. We are significantly increasing the proportion of students who will receive non-repayable grants, so that eventually two thirds of students will receive such grants.

John McDonnell: Of course. I opposed the abolition of grants in the first place, and the amount of grant currently being awarded is a pittance in comparison with what some of us gained when we went to university. I therefore support the change in principle and will work with my hon. Friend to increase the amount and improve the system.

Bill Rammell: We are in danger of being diverted. The difference between when my hon. Friend and I went to university and now is that an absolute minority of the population used to be offered that opportunity—whereas in this day and age, we are talking about a mass system of higher education, in which there must be a balance of contributions from both the state and the individual who receives and is able to repay as a postgraduate on a fair basis, but with the additional support that comes from student grants.
	Let me return to the substance of the amendments. I stress at the outset that once the loans are sold to a special purpose company and securitised, we expect it to be a rare occurrence—I would go so far as to say a very rare occurrence—that the loans will be sold on, because the sole purpose of the special purpose company will be to hold and receive income from them. The main market relating to sold student loans will be in financial instruments issued by the owners of the loans.
	The loans sold in 1998 and 1999 were sold to major banks, in particular NatWest and Deutsche bank, which then created special purpose vehicles—thesis and honours—that hold the loans and issue the bonds. I understand that ownership of those loans has not been transferred, although there is an ongoing market in such bonds. However, in any sale the purchaser would expect to have the right to sell the asset. That is part and parcel of ownership. The Bill will therefore enable the SPV to make onward sales of the loans if so desired, even though that is unlikely.
	Clause 3 makes such onward sales possible and provides for the repayment system functions to get the appropriate repayments to the current owner of the loans. It also provides very important protections so that the Government can ensure that borrowers experience no difference in treatment following a sale.
	Clause 3(6) provides three options for methods by which the Secretary of State can be a party to onward sales, ensuring that the Government have the flexibility, which is important, to provide protection for borrowers in future sales contracts. The Bill enables a long-term programme of sales, so we need to ensure that it gives us the options that we may require to achieve our aim of protecting borrowers, as transactions and contractual arrangements are likely to evolve over time.
	As I explained in Committee, clause 3(6)(a) is an option that we may want to use in future contracts. It would require the Secretary of State's explicit consent for any onward sale of transferred loans. That option is rightly included in the Bill, in case future legal circumstances make such a provision appropriate. At the moment, however, we cannot include such a provision in sales contracts, because, under the current classification rules, the Government would not achieve a full transfer of ownership if the Secretary of State retained control over the loans in that way. Resources would therefore not be released for sustainable investment on the Government's priorities, negating one of the central purposes of the sales programme.

John McDonnell: The reality is that the resources would still be received, but they would be beyond the Treasury books. They would still be available. On what grounds, on what basis and in what circumstances would the Secretary of State intervene to require his or her permission, approval or consent?

Bill Rammell: I will address that issue, but we are seeking through one of a number of options a mechanism to secure the Secretary of State's interest that secures the graduate's and the repayer of the loan's interest. That is critical to ensuring that the terms and conditions for the repayer are not changed.

John McDonnell: I just asked a simple question: what would trigger the exercise of the power to demand the Secretary of State's consent?

Bill Rammell: It is an option that we may want to exercise in future if the ONS rules change. We could then use that mechanism as opposed to other mechanisms that can secure the Secretary of State's interest. I will describe how that would work.
	I also want to address the comments of my hon. Friend the Member for Wolverhampton, South-West (Rob Marris). In Committee, he raised the issue of whether the use of the word "would" would mean that the ONS might, or definitely would, classify such matters—

Rob Marris: Within the letter.

Bill Rammell: I note my hon. Friend's comments from a sedentary position.
	Let me be clear on the issue. The decision will always be one for the ONS, but the Government and I are confident that a statement as stark as, "You cannot sell the loans on without the Secretary of State's say-so," would, under the current classification rules, trigger a decision that it was not a true sale. That is our judgment, and we want to keep that option in case of a future change in the classification rules.
	Clause 3(6)(b) and (c), which are addressed by the amendment, provide two legal ways of achieving the same end: to ensure that the Secretary of State can enforce the terms of the original contract against future purchasers. That might include provisions that, for example, purchasers must continue to administer loans though the Student Loans Company, or that borrowers continue to have access to a mediator in the event of dispute. Clause 3(6)(b) would achieve that end through contractual novation, which effectively means substituting the subsequent purchaser for the original purchaser in the contract with the Secretary of State. Clause 3(6)(c) would allow the Secretary of State automatically to be a party to any subsequent sales contract, so that he would be able to enforce its terms. It is important that we retain both those options so that we can use whichever is most appropriate at the time of a sale, bearing in mind the long-term nature of the intended sales process. I do not want to restrict our hand at this stage if, in the longer term, that would compromise the Secretary of State's interests and those of the borrower.

John Hayes: Things are becoming clearer by the moment. In answer to the intervention by the hon. Member for Hayes and Harlington (John McDonnell), the Minister effectively said, in respect of clause 3(6)(a), that "may" means "won't". In respect of clause 3(6)(b) and (c), he is now saying that he wants to add "or" or "either". If we were to add "shall", "either" and "or", presumably he would be happy. Why will the Government not do that?

Bill Rammell: Happiness does not come that easily in these matters. I want to retain flexibility for future circumstances. I shall explain what I mean by that.
	I understand amendment No. 9 to be intended to make it mandatory to follow one or other of the alternative approaches, although as drafted, it would make both mandatory, which makes no sense. We think it likely that one or other of those mechanisms will be appropriate, but it would not be right to make it mandatory to use one or other of them, as another contractual device to achieve the same end might be more appropriate, or become so in the future. For that reason, I cannot accept amendment No. 9.

John Hayes: In that case, we only need to add "either", "or" and a suffix that says something like "or an equivalent vehicle to achieve the same purpose". This is a straightforward matter, yet we seem to be dancing on the head of a pin here. The Government are saying that they agree with us, and they are more than capable of wording an amendment of their own that would satisfy the House and the intentions of my amendments and that tabled by the hon. Member for Hayes and Harlington.

Bill Rammell: The only problem with that proposition is that that is not what is on the Order Paper. It is not what the hon. Gentleman tabled in his amendment. At first take, however, his proposal strikes me as being potentially reasonable. If his party were to table such an amendment in another place, we would certainly consider it.

John McDonnell: May I be clear, then, that if "shall" were used in regard to clause 3(6)(b) and (c), it would not offend against Treasury rules or ONS classifications, and that the proceeds would not therefore count as being on the Treasury books? May I also ascertain that, at the same time, such a provision would not give the same protection as would be provided by the use of "shall" in regard to paragraph (a), which would require the Secretary of State's consent?

Bill Rammell: Depending on the circumstances, all the options secure the Secretary of State's—and therefore the repayer's—interests. With regard to the use of "shall" in respect of clause 3(6)(b) and (c), that is a judgment for the ONS. My understanding, based on advice, is that that would not contravene ONS rules.

John McDonnell: So the provision would not contain the element of control that I am seeking in relation to clause 3(6)(a)?

Bill Rammell: I think it does. Each of the options is an option to secure the Secretary of State's interest over the longer term. I think that I have made that clear.
	Finally, let me turn to amendment No. 10. I have already said that we think it unlikely that the loans themselves will be sold on. However, we have to allow purchasers to sell them. We cannot exert substantial control over such matters, since to do so would mean that the transaction would not constitute a sale. We cannot have it both ways. Once we have sold an asset, it belongs to someone else, so we cannot decide whether it is sold again or whether a subsequent purchaser will be resident in England and Wales. Indeed, any obligation to confine ownership to an organisation in England and Wales would contravene European Union law, as the Conservatives are aware. That is why it is so important to understand that we are not in the first place giving purchasers the right to change terms and conditions of the loans. What we are selling is the right to repayments of principal and interest outstanding on the loans. That is the borrowers' primary protection. Clause 3 also gives the Secretary of State the options that he needs to ensure compliance with any protections that are included in the sales contract.

John Hayes: It seems to me that the Minister is moving towards a position that has been articulated across the House. For the sake of clarity, let me say that I shall not press amendment No. 9, given that, as the Minister acknowledged, it might be framed differently in the other place to make it more acceptable and to do the job better.

Bill Rammell: I am grateful.
	To conclude, I am confident that the Bill as drafted provides the Government with appropriate and necessary flexibility to protect borrowers in the event of an onward sale and I am happy to go on the record once again to commit the Government to achieving such protection for all transfer arrangements. On that basis, I hope that the amendment will be withdrawn.

John McDonnell: I am grateful for the Minister's assurances, but I have to say that what he has suggested falls between two stools and does not give me satisfaction about the security of a Secretary of State's consent. If it did, it would offend against Treasury rules, so it would not be feasible in terms of how the Government would calculate what is on the Treasury books. If the two other paragraphs in the clause are amended in the other place, they will not provide the same security; if they did, they too would fail to comply with Treasury rules. My hon. Friend the Member for Nottingham, South (Alan Simpson) has already mentioned Catch-22, and we are in a Catch-22 situation here.

John Hayes: I am not sure that the hon. Gentleman is right about that. Far be it from me to speak for the Minister, but I believe that when he described the Treasury rules, he was absolutely clear that he was dealing with paragraph (a), not paragraphs (b) and (c).

John McDonnell: Let me be very clear. The Minister has said that his advice from the Office for National Statistics was that paragraph (a) would be classified at present as falling against Treasury rules in giving too much control to the Government. He has also said that paragraphs (b) and (c) fall against my criteria because they give insufficient control to the Government. That is the Catch-22. I shall not press the amendment, but having heard expressions of the Government's good will in the Minister's response, let us hope that the matter can be resolved in the other place on the basis of some of the suggestions in the amendments that we have debated today. I beg to ask leave to withdraw the amendment.
	 Amendment, by leave, withdrawn.

Clause 4
	 — 
	Loan regulations

Rob Marris: I beg to move amendment No. 1, in page 3, line 42, after 'reimbursement', insert 'by a defaulting borrower'.

Madam Deputy Speaker: With this it will be convenient to discuss the following amendments: No. 2, page 3, line 42, after second 'of', insert 'the reasonable'.
	No. 3, page 3, line 43, at end insert
	'in respect of that default by that borrower'.

Rob Marris: I would like a quick walk round the block on these amendments, if I may put it that way. The amendments relate to clause 4(3) and they are not designed to bring about substantive changes to the Bill, but to clarify its wording. As I read clause 4(3), it allows reimbursement to loan purchasers of some of their costs—bidding costs, for example—a practice that has become fairly common in recent years. The Government often struggle to get people to bid on private finance initiative contracts because due diligence can cost tens of millions of pounds, so in order to encourage a range of bids, prospective bidders sometimes get their expenses met by the Government. That is what I thought the subsection meant, and I did not think that it was a good idea to reimburse bidders. Amendments Nos. 1, 2 and 3 were designed to re-focus what it meant in the light of our debates in Committee.
	Since the Public Bill Committee sitting of 4 December, I have had an opportunity to look at section 22(5)(f) of the Teaching and Higher Education Act 1998, which is mentioned in clause 4(3). I think that I now understand what subsection (3) actually means, but I would like the Minister to clarify the cross-reference to section 22(5)(f) of the 1998 Act. If my first understanding of clause 4(3) was faulty, it is perfectly possible that my second understanding of it is also faulty. That is why I would like some clarification from the Minister before deciding whether to press my amendments.

John Hayes: As he said, the hon. Gentleman raised these matters earlier. His amendments make clear that
	"reimbursement of costs or expenses incurred by a loan purchaser"
	refers to costs in respect of a defaulting borrower.
	I remind the Minister, who may not have the material to hand, that in Committee in response to the sentiments expressed by the hon. Gentleman, he said that he was
	"sympathetic to the framing of that amendment, but I need to look at it in detail. If I can be reassured that it would not have an unintended consequence, I will be happy to accept it on Report." ——[Official Report, Sale of Student Loans Public Bill Committee, 4 December 2007; c. 64.]
	My advice is that it will not have unintended consequences. I hope the Minister's will be the same, in which event we can accept what strikes me as a very sensible set of suggestions.

Bill Rammell: As my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) is aware, I had an opportunity to discuss this issue with him between the Committee stage and Report.
	My hon. Friend has said that neither the Bill nor the explanatory notes explicitly specify that the reimbursement described in clause 4(3) refers to amounts payable by a borrower. That is true, but as I think my hon. Friend accepts, the point is made explicitly in the Act to which the subsection refers. Section 22(5)(f) of the Teaching and Higher Education Act 1998 allows the Secretary of State to make regulations enabling the recovery of specified costs and expenses from the borrower incurred in recovering the outstanding balance of the loan. The wording of the existing legislation refers explicitly to borrowers. Clause 4(3) therefore simply enables those regulations to provide for the reimbursement that currently applies to the Secretary of State to be made to the purchaser of sold loans.
	On that basis—and I have discussed this with my hon. Friend—I genuinely believe that the amendment is unnecessary. However, I should be more than happy to amend the explanatory notes to make the meaning and effect of the subsection clearer. That was really the issue at the start of the debate, and I hope that on that basis my hon. Friend will be reassured.

Rob Marris: Such are the little victories of Back Benchers! I do not get to amend a Bill, but my hon. Friend the Minister has generously agreed to amend the explanatory notes before it goes to the other place.
	On that basis, I beg to ask leave to withdraw the amendment.
	 Amendment, by leave, withdrawn.

Clause 5
	 — 
	Repayment

Amendment proposed: No. 7, page 4, line 9, leave out
	'a person acting on behalf of a loan purchaser'
	and insert 'the Student Loans Company'.— [Mr . Hayes .]
	 The House proceeded to a Division:—

Mr. Deputy Speaker: Order. I ask the Serjeant at Arms to investigate the delay in the No Lobby.

The House having divided: Ayes 212, Noes 284.

Question accordingly negatived.
	 Order for Third Reading read.

Bill Rammell: I beg to move, That the Bill be now read the Third time.
	We have had a thoughtful debate today, as we did in Committee. I thank the members of that Committee for the constructive way in which they contributed at that stage. The Bill has enjoyed a good measure of consensus about its basic principles, with wide agreement that it is right for the Government to consider how the growing student loan book is managed so as to ensure good value for money and sound management of public finances.
	It is accepted across the House that a sales programme for student loans is appropriate, provided that it yields good value for money and that the position of borrowers is not affected. Those two issues are the Government's policy objectives in proposing that we embark on a sales programme. During the course of the debate, hon. Members rightly sought to satisfy themselves that the Bill allows us to ensure that the proposed sales will meet those specific objectives. We have taken the view that the small number of amendments proposed should not be accepted, but we acknowledge that the intention behind them has been to ensure that the aims that we have set out for the programme of sales come to fruition.
	I shall now reiterate the key commitments that I emphasised when we embarked on our consideration of the Bill in November. The terms and conditions for all loans will, as now, be governed by regulations scrutinised by this House. I confirm that there will be no adverse change for borrowers, whether their loans are sold or retained, and I hope that that gives some further reassurance to my hon. Friends the Members for Hayes and Harlington (John McDonnell) and for Nottingham, South (Alan Simpson).
	The borrowers' experience will not change and the collection and administration systems will be the same, whether or not a loan has been sold. The Bill contains the provisions that we need to ensure that the enduring protection for borrowers is secured. All transactions will be subject to a rigorous assessment that good value for money is being achieved—a matter that has been the subject of much discussion, both in Committee and in today's debate.
	Some hon. Members have asked whether material for testing value for money should be included in, or appended to, the Bill. As I have said, I do not believe that that can be done: it would be irresponsible to put in the public domain in advance of a transaction any details of the Government's assessment of what price would constitute good value for money, as that would undermine the competitive process. In any event, such an assessment would be different for each sale in what is a long-term programme, as the characteristics of each portfolio to be sold are unlikely to be identical.
	What principles govern the value-for-money assessment, and what issues will be considered? I explained the Government's approach on Second Reading, and I am happy to do so again today.
	Part of the value-for-money assessment will involve the gathering of full and clear market information, and weighing the value of keeping the loans in the public sector on the balance sheet of the Department for Innovation, Universities and Skills. That process will help us to compare bids for selling the loans against the value of holding them. Assessing those values will require various estimates of the level of repayments to be made by borrowers, stretching far into the future.
	In addition, we will estimate the rate at which graduates will repay their loans, and the number of loans that will have to be written off because, for example, the people who have taken them out have become permanently disabled. Those projections will have to be based on assumptions and estimates, so it is clear that they have a built-in degree of risk. In assessing value for money, we will also have to take into account the value of transferring that risk from the public sector to the person who buys the loan. That is not something that lends itself to precise quantification, so the assessment will have to consider a range of values based on differing assumptions and estimates of risk.
	That is only one part of the value-for-money assessment. The other elements include ensuring that a sale is competitive, that it takes place under normal market conditions, that potential bidders have enough information to make informed bids, and that there is a genuine transfer of risk from Government to purchasers.
	We are making a clear commitment that sales will take place only where good value for money can be assured. It will be for the Government of the day to make a judgment about value for money for each proposed transaction. Some elements involved in that judgment may alter over time, for example as market conditions change and as the experience from earlier sales is built on. As I have said repeatedly, the judgments will be open to parliamentary scrutiny in the usual way. The Government will report to the House after each sale transaction, and no doubt the National Audit Office will report to the Public Accounts Committee on the programme of sales as a whole.
	The debate on the Bill has been a constructive but rather technical discussion of how we can ensure that the programme of sales can proceed. It has also dealt with how we can fulfil our commitment that borrowers will notice no effect. I hope that I have been able to explain more fully how the Bill will achieve the Government's widely accepted policy objectives. No one should doubt our commitment to working in a thorough way to ensure that the sales programme is a success for borrowers, the Government and the taxpayer alike.

John Hayes: The Minister described this as a technical Bill and it is certainly complicated. That is not to say, however, that its provisions are not significant to a very large number of people and that they do not have political ramifications. The Bill is in line with Conservative intentions to move the student loan book to the private sector, but those intentions are not without qualification. Throughout—both during the Bill's consideration and earlier—we have made it clear that the transfer from the public sector to the private sector cannot be made unless proper safeguards are in place to protect both the public interest and borrowers.
	I have no doubt—this point has been made previously, but it warrants reamplification—about the Minister's intention or integrity. However, when we pass legislation in the House, it is vital that we detach that legislation from the characteristics or strengths of any particular Minister, because we do not know who the Minister might be in a year or two. Of course, in the happy eventuality of our winning the next election and my becoming the Minister, these matters will be in even more secure hands than they are now. However, we cannot rely on that happy eventuality, which is precisely why thus far and, I hope, in the other place, there has been and will be a determination to ensure that those safeguards are in place.
	That brings me to the three or four central points that I want to make on Third Reading. The first is to reprise the argument about value for money. When giving oral evidence in Committee, the Minister said:
	"Clearly, the Bill gives us enabling powers to undertake value-for-money assessments over a long period of time...we have said within the forthcoming three-year comprehensive spending review that we are looking to make sales to the tune of £6.3 billion. Having said that, if we do not judge that the market conditions are appropriate for those sales and we do not think that we will get value for money, those sales will not go ahead." ——[Official Report, Sale of Student Loans Public Bill Committee, 4 December 2007; c. 3, Q1.]
	This seems to contain a paradox, possibly even a dilemma. The circumstance could arise in which the Treasury says, "Where is our £6.3 billion?", but the market conditions and prevailing circumstances are not ideal for a sale. When the provision is set out for a three-year period, it is a bit rich to argue that if the circumstances are not right, one will ignore that and delay the implementation of the Bill to an indefinite future date. I cannot really believe that the Minister thinks that is likely. Just to be sure, Opposition Members have tabled amendments to make it clear for his benefit—he should see this not as a harpoon but as a lifeline—what the value-for-money criteria are and to place them securely in the Bill.
	The Minister will argue, and no doubt has argued, that such a provision would be too inflexible and that it is dangerous to write into a Bill things that are, by their very nature, dynamic—in which case, why did he not come before the House and offer an alternative? He could have appended the value-for-money criteria to the Bill or guaranteed to provide it in guidance. He could have suggested that it would at least be made public. We hear that there is a value-for-money framework, which must include criteria, because the Minister has said so repeatedly on Second Reading, in Committee and again today. However, no one is allowed to see it. If there is such a framework, the debtors, the public and certainly the House have a right to know what it is, and it should be securely attached to the Bill in some form or another.
	That brings me to my second point. We need to know something about the value of the loan book. My hon. Friend the Member for Reading, East (Mr. Wilson), in a remarkably eloquent speech, spoke about an assessment of the value—it is a changing value—of the loan book measured against the Government's determination to make £6.3 billion. Without, I hope, being impertinent, I suggest that the target of £6.3 billion might be achieved regardless of the true value of the loan book unless we are absolutely secure about the systematic criteria for the sale.
	At the end of the financial year 2006-07, the student loan book was valued at about £8.1 billion. Perhaps the Minister will at some stage tell us of any subsequent valuations that are made, and say what the projected valuation of the loan book is for the next two or three years. Those figures should be readily available to the Department, because it can project based on information that is in the Government's hands. From that, we could draw conclusions about what portion of the book would need to be sold to achieve the £6.3 billion target.
	We should consider the question of what parts of the book would be sold first. The Minister said that some parts of the loan book were more attractive than others. That is a perfectly plausible argument. He says that where there is an established record of repayment there is more security, in the eyes of a prospective purchaser. He further argues that the situation changes over time, because as people become established repayers, they become a better risk—a surer bet. My question to the Minister is: does that mean that the less attractive parts of the loan book are the bits that will stay with the Government? If we unload the most attractive, valuable bits first, are we not left, at the end, with the least attractive, least valuable bits? That does not seem to shift risk from the public to the private sector; it seems to shift benefit to the private sector, and retain risk in the public sector. We need to be absolutely sure how the book will be split up, how judgments will be made on what is sold and when, and what proportion of the book the Minister anticipates is likely to be sold over the next three years.
	There was considerable discussion of the issue of resale, both today and previously. Members on both sides of the House expressed concerns about the possibility of debt being collateralised, broken into parts and sold to the highest bidder. The Minister assures me, and the House, that he thinks that that is unlikely, but the provisions of the Bill explicitly make it possible. Once again, he is on the horns of a dilemma: he dare not build in protection against resale, because that would make the product less attractive but, as a matter of public interest, he has to assure Members of the House that if debt were resold to an agency or body outside the Secretary of State's jurisdiction, or about whom we had the most severe reservations, there would not be a risk to borrowers or the wider public. That is a difficult circle to square, and I am not sure that the Minister did it convincingly today. There must be adequate protection, both for borrowers and from the point of view of the public interest. That is why we tabled amendments to attempt to ensure that resale was dealt with sufficiently, and in the most appropriate way.
	In a similar vein, the collection of debt has been considered, although we did not debate the issue at length on Report. I think it is unacceptable to lose control over who collects the debt. The Bill suggests that an agent appointed by a purchaser could have control of debt collection. We need to be stricter in how we deal with the issue of debt collection. I think that the other place might take that view, too, but it is not for me to anticipate its standpoint. If there is one thing that will cause alarm and anxiety among current debtors and potential future borrowers, it is the idea that their debt might be collected by an inappropriate agency, so I am a little disappointed that the Government did not make further concessions on the issue of debt collection. I suspect that that is because, once again, it might make the sale unattractive to a potential purchaser, but when it comes to debt collection—a sensitive matter—we need to be sure who will be involved in the process. The Student Loans Company seems the most appropriate body to deal with these matters. Surely it could be written into the Bill.
	When challenged on those matters during the witness session of the Public Bill Committee, Michael Hipkins, the Minister's adviser, who was a witness to the Committee, said:
	"The point in terms of legislating for the long term is that the Student Loans Company might not exist in the long term, so there needs to be flexibility in the Bill to specify collection by whomever the Secretary of State would like".
	But the Bill does not say that. It refers to an agent appointed by a purchaser, not to someone whom the Secretary of State would like or not like. In addition, the Minister, clarifying his position, said that the Government
	"have no plans to do away with the Student Loans Company" —— [Official Report, Sale of Student Loans Public Bill Committee, 4 December 2007; c. 36, Q107.]
	On the one hand we are told that we cannot name the Student Loans Company because it might go, and on the other we are told that it will not go, at least for the foreseeable future. Next we are told that the Secretary of State will be able to choose the agency that collects debt; then we are told in the Bill that he will not be able to choose who collects debt. That aspect of the Bill needs to be clarified by Ministers in the course of its progress.
	We have had serious consideration with a diligent Minister, who seems to have listened to arguments and, as I said earlier, acted with professionalism and generosity. The Bill is technical, but its real significance should not be masked by its technicalities and complexities. It is about moving a substantial amount of money from the public to the private sector. It affects the lives of many millions of our countrymen—many of the people whom we represent. It is important that the House insist on appropriate safeguards, both in the public interest and in their interest.
	Although the Opposition will not seek to divide the House on Third Reading, I hope that when the matter is considered in the other place, some of the arguments rehearsed in Committee and again on Report not just from the Opposition Front Bench, but from other parts of the House, are made once again, listened to and taken on board by the Government.

John McDonnell: In response to the Minister's assertion that there is consensus about the Bill and the student loans system, I do not wish to disillusion him or to undermine our admiration for his powers of persuasion, but some of us do not support student loans, or the Government's legislative proposal, because it further embeds the student loans system.
	That system has brought about an average debt of £15,000 for most students, which on average they take 13 years to pay off. The Minister's response was that the system had enabled a larger number of people to pursue a university education. My view, and that of many of my colleagues, is that in the fifth richest country in the world we should be able to afford to pay people proper maintenance grants to enable them to access university education on the scale that the Government envisage—50 per cent. of young people. To drive people into debt in this way not only burdens them with that debt, but undermines their enjoyment of the education that they receive while they are at university.
	Apart from consolidating the student loans system even further, the Bill causes other anxieties. We know from the Red Book that it is envisaged that the Bill will raise £6.3 billion, but nowhere in the Bill does that sum become hypothecated to funding education; it could go elsewhere. If we are to sell off an educational asset that has been brought in as a result of the educational provision that we make for our students, that money should be used for higher education.
	As is shown by some of the information that we have heard today, which I accept the Minister contests, the bursary system is not working as effectively as it should. We could use the money from the sale to increase maintenance grants at the same time—to improve provision overall.
	The Bill allows the Secretary of State to retain control over the interest charges levelled against students who take out student loans, but it does not address the key issue—the bizarre situation of the Government's using so many different measures of inflation and interest rates to charge against loans. We use the consumer prices index, currently at 2 per cent., to award wages but the retail prices index to determine how much we levy on the burden of loans. I regret that the legislation did not address that matter.
	I am not convinced that we have enhanced the Secretary of State's role within the system to give us in the long term the security that we have sought today. I am thinking particularly about onward sales, which are one of our key anxieties. If it is important to secure the detailed involvement and approval of the Secretary of State on the initial sale, it is even more important that we secure his involvement on onward sales. That might offend against Treasury rules, but as was mentioned earlier, when it comes to Northern Rock and other matters, Treasury rules seem to fly out of the window.
	I hope that further safeguards will be applied in the other place and that we then debate them here to provide the maximum long-term security—not only for those who take out and rely on student loans, but for the taxpayer as well.

John Hayes: The hon. Gentleman was not entirely satisfied with the Minister's assurance about what he might do in respect of accepting amendments in the other place. However, will the hon. Gentleman invite the Minister to reaffirm that willingness to consider the issue of onward sales and the Secretary of State's involvement in them?

John McDonnell: The hon. Gentleman need have no fear that I shall not pursue the matter in my comradely dialogue with the Minister. Others will as well, because the issue is significant.
	There has been reference to other privatisations. We referred to the Mapeley incidents, and I had thought that we had learned lessons about whom we sell public assets to and about the requirements for detailed scrutiny and the Secretary of State's accountability for sales of public assets. In the current state of the market, the Government will do well to achieve the money they estimate they will get from the proposed sale. At the moment, the market is so rocky and there is so much insecurity; we face credit crunches, particularly in the housing market, and we may face a downturn and recession.
	I caution the Government to consider seriously whether the coming 12 months is the right time even to launch the asset sale proposal. I would welcome a Government commitment that 12 months after any action on the sale, we would receive a full report that could be debated, inform future measures on the privatisation of public assets and help us to decide whether we are achieving value for money. I have considerable doubts about whether we got value for money on the first transfer of sales in the late '90s, and I certainly doubt whether we will from this sale.
	I want to leave the Minister with no illusions. I oppose the legislation and the student loans system. However, I am convinced that at some point, the Government—just as they have moved in the past two years on the restoration of some maintenance grants—will return to the happy position of a full maintenance grant system, and that we will be able to abolish student loans in the long term.

Stephen Williams: It has been my duty on behalf of my party to carry the baton round the final lap of the debates on the Bill. I missed its Second Reading and Committee stage because I had a different responsibility at the time. I thank my hon. Friend the Member for Brent, East (Sarah Teather) for her work during the earlier stages of the Bill.
	We have had a good discussion involving lawyers, accountants, business men and Back Benchers being mildly critical of their Government. We have also had an interesting discussion about the effect on balance sheet accounting of "shall" rather than "may". It is a shame that we must now leave it to the other place to sort out an acceptable wording. Throughout, we have all been trying to achieve safeguards for students, value for money for the taxpayer, and transparency.
	This is a small and technical Bill, but it involves a huge amount of money for the Government. It raises in excess of £6 billion to be allocated over the current comprehensive spending review period, so it could release £2 billion a year. I hope that higher education might see the lion's share of that significant injection into the Treasury's coffers. The Government have made significant investment, in some cases through off- balance sheet financing, in the secondary school and further education estates, but there is an opportunity also to make further investment in the higher education estate, where some of the teaching facilities are perhaps not as good as youngsters now leaving school and college are accustomed to in their pre-18 learning experience. Higher education needs the investment to ensure that its teaching facilities match their expectations.
	Debt is a very significant area of concern for students, as the hon. Member for South Holland and The Deepings (Mr. Hayes) rightly said, and that is reflected in the most recent attitude report, "The Student Experience Report 2007" put together by UNITE, the national private sector provider of accommodation that has its headquarters in Bristol. It showed that 74 per cent. of students currently have their borrowings from the Student Loans Company, but many of them have to take out secondary sources of finance as well, such that 41 per cent. also have a bank overdraft, 16 per cent. have outstanding credit card loans, 7 per cent. have a personal loan, and many others have second credit cards or store cards, or finance their university living expenses through unpaid utility bills.
	Part of the problem is that the maximum amount by which students can benefit from the Student Loans Company is set at an unrealistic level. I was staggered to find that to live in my choice of hall of residence, or any other hall of residence, at Bristol university today would require the vast bulk of the maximum amount that the Government would allow me to borrow on cheap credit terms from the Student Loans Company, leaving me with only about £200 to buy my weekday lunches and to finance the purchasing of textbooks and the refreshments that are an essential part of the student living experience.
	We need a fundamental review of how students' living costs are financed for the three years or more that they are undergraduates at university. The UNITE report showed that 38 per cent. of students who were first years last year, when the report was put together, were already seriously concerned about their levels of debt. Serious research needs to be done about the fear of debt, which is even greater among students from lower socio-economic backgrounds, and the effect that it has on drop-out rates in higher education. The Government are to have a full-scale review of the financing of higher education next year, and I hope that that review will include a serious look at how students finance themselves through higher education, so that we can ensure that the burden of debt does not drive people out of it and undermine the Government's otherwise laudable agenda for widening participation.

Alan Simpson: I begin by reassuring my hon. Friend the Member for Hayes and Harlington (John McDonnell) that there is a consensus in this House—certainly between us—that the shift from grants to loans was undesirable, and that the plan to shift loans from being public debts to private ones, which are somehow seen as more morally virtuous, is not acceptable. We are at one. He can rest secure as part of that consensus. However, it is important to recognise that important concessions have been made during the debate. I do not think anyone in the House needs the Minister to repeat the reassurances he has already given. Some important amendments were moved and debated this afternoon, and I am hopeful and confident that when they are reconsidered in another place, many of the points on which we were reassured by the Minister will be discussed.
	I shall focus on two points. First, at some stage, this House ought to consider Treasury rules—what is permitted and what is not. It seems perverse to me that we have moved to a position where debt is morally virtuous if it is in the private sector rather than the public sector. That shift has taken place on a much larger canvas in society. We in this House are obsessed with the control of public debt, but we have turned a completely blind eye to the escalation of private debt that ultimately has thrown the economy into a severe crisis. I hope that we all recognise that the Government are a more competent borrower than any of us are individually. They can borrow at rates that none of us could. We ought to consider why we adhere to rules that make a debt virtuous simply because it disappears off the Government's balance sheet. Enron tried to work in the same way and got into an horrendous mess. There is a case for philosophically considering how we honestly address the levels of debt and the management of debt in society.
	Secondly, an inequality and an injustice is embedded in the system. It would have been tackled by an amendment tabled by my hon. Friend the Member for Hayes and Harlington, but unfortunately, we were not able to debate it. It dealt with the interest charges relating to student debt. They are supposed to be inflation-only debts, but we have almost ended up in an "Animal Farm" situation, where some measures of inflation are more equal than others—and some measures are more manageable than others. I am talking about the benchmark measurement against which inflation is judged as it is applied to student debt. That has a crucial impact on the management of debt for the individuals involved, and the scale of it is about £20 billion. In the next 10 years, that debt will amount to about £55 billion—a figure ominously similar to the undertakings given to guarantee Northern Rock's survival. Those affected by the repayment of that debt are critically influenced by the calculation of inflation.
	The Government measure for the calculation of inflation has been the retail prices index. That is a snapshot measure, taken in March, which judges the rate of inflation that is taken into account for student debt repayments. Last March, the rate doubled from 2.4 per cent. to 4.8 per cent. This was the subject of a huge number of complaints from students and graduates who are repaying debts. They pointed out that the Government use a number of different measures for inflation. The Prime Minister legitimately claims that inflation in the UK is 2 per cent. The consumer prices index measures it at just over 2 per cent. That is the benchmark against which the Government judge what is affordable for public sector pay increases. It leaves many students in a terribly anomalous position.
	I tried to get the figures for students who, on graduation, move into some form of public sector employment. The latest figures that I could get were for 2005-06. In that year, more than 120,000 graduates went into public sector employment and carried with them their student loan debts. Since then, they have repaid the debts at the rate defined by the retail prices index, but their pay increases have been defined against the benchmark of the consumer prices index. Those 120,000 graduates—more than half the university graduates in the UK—find themselves in a position whereby the charges on their debt repayments increased at twice the rate of the inflation that was recognised in their pay settlements. That injustice built into the process has been a constant source of grievance.
	I hope that the Government will take the opportunity when the Bill is introduced in another place to examine a mechanism that gives us a single benchmark measure. We must all live with what is judged to be the rate of inflation. However, it cannot be fair—I have yet to hear an argument that it is fair—to use one measure of inflation to judge the rate at which students repay and another, lower rate to determine the basis on which they are paid. It would help the House and the process enormously if we used a consistent measure, given that more than half the graduates who leave university are affected by the problem. We should at least have a consistent and equitable measure.

Adam Holloway: I would like to say a little about the effects of the Bill on young people in low-income families because I was alarmed to learn that 18 per cent. of the population of my constituency have NVQ level 4 or above, compared with a national average of 27 per cent. and an average of 30 per cent. in the south-east. When I speak to young people in my constituency, I tend to get a stock response that they are worried about being saddled with excessive debt, which they have no realistic chance of repaying. A more fundamental problem is that they do not view higher education as worth the expense. That is not helped by press reports about the sparsity of well-paid graduate jobs. Although I support the principle that those who benefit from higher education should shoulder some of the cost, the statistics on participation rates in my constituency seem to represent a huge waste of talent. It worries me that the financial barriers to further education are still not being broken down rapidly enough.
	I want to raise the potential for a new commercial owner of the student loans portfolio to increase interest rates on that asset to market rates, instead of maintaining the current subsidised inflation-linked rate, once the portfolio of student loans has ceased to be a public asset and been transferred to the private sector. We have all read in the newspapers about the impending credit crunch in the financial markets, which will bring the deteriorating availability of credit for companies and households and the increasing cost of borrowing throughout the economy. Clearly, the financial organisation to which the student loan portfolio will ultimately be sold as a result of the Bill expects to make a profit from the assets, and I wonder whether there will be a temptation in the current lending environment for it to boost interest rates on student loans to market rates once it has assumed economic ownership.
	With the London inter-bank rate at around 6 per cent. and the interest rate on student loans at 4.5 per cent.—a differential that, according to estimates by Professor Nicholas Barr of the London School of Economics, equates to a subsidy of about £1.2 billion a year—I wonder how any commercial organisation can agree indefinitely to offer loans at more than a full percentage point below the rate in the wholesale financial markets. The risk is that students will at some point face commercial rates on their student loans. A rise in interest rates of 2 per cent. to bring the terms on student loans in line with those attainable in the broader financial markets could equate to an extra £300 a year in interest charges on the average debt of £15,000.
	Finally, I should like to talk briefly about publicity schemes for low-income households. The Government claim that they want a participation rate of about 50 per cent. by 2010, but given the low rates of participation in further education in my constituency, I wonder whether more investigation is needed of the accessibility and visibility of the information on bursaries for students from low-income households. If we aspire to a fully meritocratic society, in which the financial circumstances of a person's parents are no barrier to educational opportunity, and if the perceived cost of university or further education is dissuading many from attending, should we not analyse whether more needs to be done to publicise the financial assistance schemes that might be available to those on low incomes?

Bill Rammell: I should like briefly to sum up the debate and to refer first to the previous speech, by the hon. Member for Gravesham (Mr. Holloway). There is an expression, "It's a bit rich," and his contribution was extraordinarily rich. The commercial rate of interest that he described was exactly that which was put forward in his party's manifesto at the previous general election. Had a Conservative Government been elected, I have no doubt that he would now be supporting that policy. During the Committee stage, I asked whether that was still the Opposition's policy, and I understand that it is. I am most emphatically against a commercial rate of interest, so if the hon. Gentleman wants to apply pressure on the issue, he needs to talk to those on his own Front Bench.
	The hon. Gentleman also asked what we should say to students who do not aspire to continue into higher education. I think that we should tell them the facts. We certainly should not exaggerate or use terms such as "excessive debt". Under the postgraduate system of repayment that the Government have established, no student repays a penny until they are in work and earning more than £15,000 a year. On the average graduate starting salary of £18,000 a year, the repayments are as little as £5.19 a week. Those facts, along with the facts on the substantial graduate earnings premium—the average graduate will earn, net of tax, £100,000 more than someone with just two A-levels over the course of a working life—and all the other benefits of a higher education, should be at the centre of the arguments that the hon. Gentleman ought to be putting to his constituents.
	The hon. Member for South Holland and The Deepings (Mr. Hayes), who leads for the Opposition, asked for reassurance and expressed concerns about the value-for-money framework. I have said on many occasions during the passage of the Bill that the value-for-money framework that I have read into the record is rigorous and robust. I have been wondering during this debate whether similar value-for-money frameworks were in place when much more substantial asset sales of public utilities took place in the 1980s. I do not recall that being the case.
	The hon. Gentleman asked me about the projected valuation of the student loan book. We estimate that the valuation will be £21 billion next year—up from the current £18.1 billion—and £25 billion the following year. He also asked about the selection of the loans for sale, as did the hon. Member for Reading, East (Mr. Wilson). I want to nail this issue, because it is important—I made these points in Committee, but I will repeat them now.
	From the outset, we will seek to offer for sale all those loans that we can sensibly expect purchasers to be able to value properly. We will be guided by the financial sector experts whom we are procuring to help us to prepare and execute the transactions. For initial sales, that might mean selecting for sale loans that are, for example, sufficiently connected with the repayment system through Her Majesty's Revenue and Customs. Over time, as the repayment history of the loan book lengthens, potential purchasers will be able to model with confidence the value of an increasingly high proportion of the loans. In contradiction of what the hon. Member for Reading, East said, we will explicitly not select loans for sale based on the individual characteristics of loans or borrowers, but just by category, such as being in the repayment phase.

Robert Wilson: There is some confusion about that in  Hansard. At column 31, the Minister says of the picking of loans:
	"It will not be on a random basis."
	At column 32, however, Michael Hipkins, his director of strategy, says:
	"we expect a random draw from the loan book." ——[Official Report, Sale of Student Loans Public Bill Committee, 4 December 2007; c. 31-32, Q88.]
	The Minister can understand how we can be confused if his own director of strategy is confused.

Bill Rammell: That is not the case. If the hon. Gentleman reads the record carefully, he will see that the matter was made abundantly clear. When we talk about a random draw, we are talking in terms of the type of loan, not about picking and choosing between individual loans. It is important to make that clear.
	The hon. Member for South Holland and The Deepings expressed a number of concerns about collection methods. Let me be explicitly clear. It is not, and will not be, for the purchaser to specify collection methods. Clause 1(4)(d) says explicitly that the Secretary of State may require the purchaser
	"to make specified arrangements in connection with the administration of loans".
	In response to the comments by my hon. Friend the Member for Hayes and Harlington (John McDonnell), let me assure him categorically that I have no illusions: I am clear that he disagrees with me and the Government on this issue. I hope that he will accept, however, that it is a legitimate disagreement. There is a respectable left redistributive argument in favour of the system of student finance and fees that we have created. That is not his view, but others on the left take that view.
	My hon. Friend made a point about hypothecation of the proceeds from the sale of student loans. Let me make it clear that our record of investment in higher education is the best for a generation: it has increased by 23 per cent. in real terms over the past decade. I caution him against arguing for explicit hypothecation. Were we to put forward the argument now that the proceeds from sales must go to the higher education budget, that would create the grounds and circumstances for a future Government, who were not as well disposed towards higher education as we are, to say that higher education expenditure was dependent on loan sales. That would be a dangerous road to go down.
	My hon. Friend also said that there should be no real rate of interest. It is important to make it clear that our RPI mechanism means that there is no real rate of interest. I would wish to assure my hon. Friend the Member for Nottingham, South (Alan Simpson), who is no longer in the Chamber, that that RPI rate does go up and down, but for the vast majority of borrowers with income-contingent loans it makes no difference whatever to their monthly repayments, which will continue to be deducted at the rate of 9 per cent. of any income over £15,000 per annum. The interest rate affects only their outstanding loan balance.

John McDonnell: My hon. Friend the Member for Nottingham, South (Alan Simpson) and I have received representations from the National Union of Students, which informs us that it has written to the Minister and received no response as yet. It would welcome a meeting with him, and would be pleased if we could arrange that and attend as well. I welcome him to the left in the discussion about the funding of higher education. At some stage, we will also have a welcome discussion about direct taxation. He will have another opportunity to demonstrate his left credentials next week, when I seek to raise the bar on national insurance contributions to pay for such educational achievements.

Bill Rammell: My hon. Friend will forgive me if I do not commit myself to that at this stage. I meet the National Union of Students regularly, have discussed the issues with it and will do so in future. If he wants to be involved in that, and to talk to me directly about it, I would be happy for him to do so.
	The hon. Member for Bristol, West (Stephen Williams), who leads for the Liberal Democrats, managed to produce a complete speech without revealing that, when they had the opportunity to do something about this issue when they were in government in Scotland, the Liberal Democrats supported a postgraduate system of repayment that is no different in principle from the system that we have in England. He also managed to complete his speech without making it clear that the Liberal Democrats have no policy whatever on student fees, because they are reviewing their position. One Liberal Democrat think-tank has actually said that it agrees with the Government's position. Indeed, it has gone further and said that we should now commit to lifting the cap on tuition fees. That is not a position that I support.

Stephen Williams: The Minister would not expect me to let him get away with that. Think-tanks can cause problems for all parties. The think-tank that he mentioned is independent of my political party, as are all think-tanks. Yes, we are going through a review. It is a full review of all our higher and further education policies, which will be discussed openly at a conference later this year. My party, unlike the Minister's, will have a full democratic vote on its future policies.

Bill Rammell: I was aware that the Liberal Democrats were undertaking a review. One of the most enjoyable experiences that I have had in a long time was reading the transcript of the interview that his predecessor gave to Andrew Neil at the Liberal Democrat conference, in which an attempt was made to explain the gyrations that were taking place over Liberal Democrat policy on higher education. And, for the record, it was a Liberal Democrat think-tank, supported by Liberal Democrats, that supported the Government's position.

John Hayes: The Minister has not mentioned a point that was raised by a number of hon. Members. On the issue of onward sales, particularly in relation to transfer arrangements, is the Minister absolutely clear that the Secretary of State should be party to those arrangements? Is he determined to put in place changes to the Bill that will allow the Secretary of State to be party to them? Is he also clear that, in respect of onward sales, the loan book will not be sold—in part or whole—to any organisation or body that is offshore or that, in the judgment of the House, would not be an appropriate body to handle these matters?

Bill Rammell: I can give the hon. Gentleman a fundamental reassurance on ownership. The contracts will be based on English law and will apply to English law. That ought to give a significant degree of reassurance. He will forgive me if I do not rehearse the arguments that we had on Report about the opportunities for the Secretary of State to be associated with the sales. The amendment that the hon. Gentleman tabled today did not directly address the point that he subsequently went on to make, but if an amendment on that point is tabled in another place, I will give it my active consideration.
	Finally, I want to reiterate that the proposals are about the sensible management of the public finances. They are not about impacting on the borrower. The Bill will entail no change whatever to the borrower. Whether the borrower's debt is owned by the public sector or the private sector, they will notice no difference whatever. On that basis, I hope that hon. Members will support the Bill.
	 Question put and agreed to.
	 Bill accordingly read the Third time, and passed.

EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

Euro-Mediterranean Partnership

That this House takes note of European Union Document No. 15869/07, Commission Communication, The Euro-Mediterranean Partnership—Advancing Regional Co-operation to Support Peace, Progress and Inter-Cultural Dialogue; and agrees that the Barcelona Process may have potential to help promote UK objectives, provided it focuses not on process but on effective delivery through partnership.— [Mr. Khan.]
	 Question agreed to .

PETITION

Planning (Bedfordshire)

Nadine Dorries: I am presenting this petition on behalf of the residents of Aspley Guise village in my constituency.
	The petition declares:
	That the South East Region is seeking to take over planning authority for Aspley Guise, which is part of Mid Bedfordshire.
	The Petitioners therefore request that the House of Commons urges the Secretary of State for Communities and Local Government to protect their democratic rights for the future of their village to be planned through the proper process of the East of England Plan and not dictated by a neighbouring Region, the South East; and further urges the Secretary of State to instruct the Government Office for the South East to remove any proposed housing numbers for Aspley Guise in any future revision of the South East Plan and to make arrangements for a future review of the East of England Plan to include consideration of any new housing development in Aspley Guise.
	And the Petitioners remain, etc.
	[P000108]

NHS MATERNITY SERVICES (EAST SUSSEX)

Motion made, and Question proposed, That this House do now adjourn. —[Mr. Khan.]

Nigel Waterson: I am very pleased to have the opportunity to raise a subject of enormous importance to my constituents in Eastbourne, Willingdon and East Dean. This is far from the first time I have raised this topic in the House, as I have asked parliamentary questions about it, participated in debates and even had a meeting about it with the previous Prime Minister.
	On 20 December last year, the local primary care trusts decided to remove consultant-led obstetrics and the special care baby unit from Eastbourne and to establish a single site at Hastings. Only last Wednesday, I raised that issue with the current Prime Minister at Prime Minister's questions. In his reply, he claimed that those changes were recommended by local doctors and were in the interest of patient safety, but I have to tell the House that the Prime Minister was grossly misinformed. Prime Ministers are busy people, so I would not expect him to have all the local details readily at his fingertips, but someone misled him. Every single general practitioner in my area—more than 100—and many consultants are firmly against the proposals. Particular credit should go to Dr. Simon Eyre, a member of the local PCT, who broke ranks at the crucial meeting and set out in great detail why he now opposed the decision.
	In recent years, two respected consultant gynaecologists—Vincent Argent and Kent Ayers—left the local hospital trust, in part because of the proposals; the consultant advisory committee at the Eastbourne district general hospital has come out publicly against the proposals; paediatricians who recently met the PCT were against them; and at least three of the eight current consultant obstetricians were against them, too. Remarkably, a previous high profile and early supporter of those proposals, Mr. Mark Malak, the leading gynaecologist, withdrew his support and asked that his comments in support be withdrawn from the official documents circulated to the public, although that did not happen. The East Sussex LMC—local medical committee—representing all GPs in the county opposed the proposals and as recently as 5 December my local PCT's own professional executive committee voted for two sites for maternity services.
	Only today, I heard from Mrs. Scarlett McNally, a consultant orthopaedic surgeon at Eastbourne DGH. She produced a letter yesterday objecting to the closure, which has already been signed by 34 consultants from across the range of specialties. Let us therefore put to bed once and for all the absurd spin suggesting that the proposals are somehow backed by, or even originated with, local clinicians. It is simply untrue. It seems to me that NHS bureaucrats, and possibly Ministers, are seeking to use local doctors as a human shield in this situation.
	I want to pay tribute to the excellent campaigns running in parallel in my constituency and in Hastings—the Save the DGH campaign in Eastbourne and the Hands off the Conquest campaign in Hastings. I would particularly like to single out Liz Walke, one of my constituents, who has done a wonderful job in leading the campaign from the front, helping to organise marches, protests and petitions. Between them, the petitions have attracted some 80,000 to 90,000 signatures across Eastbourne and Hastings. The fundamental principle that has always driven our Hands off the Conquest campaign is not one of beggar my neighbour or competition with each other to be the one to end up with a full maternity unit. Rather, in meeting the health needs of our local populations, we believe that it is broadly right that we continue to have full maternity units in both Eastbourne and Hastings.
	I also want to take the opportunity to thank neighbouring colleagues who have worked closely in support of our campaign: my hon. Friends the Members for Wealden (Charles Hendry) and for Bexhill and Battle (Gregory Barker) and the hon. Member for Lewes (Norman Baker). They have all been extremely supportive, while in one or two cases fighting their own border disputes in relation to facilities affecting other parts of their constituencies.
	I remind the Minister that the biggest single issue is the 21 miles of poor roads between my local hospital and Conquest hospital in Hastings. National guidelines suggest that in the case of an emergency Caesarean, the ideal time from decision to incision—as the expression goes—is less than 30 minutes in the most urgent cases. Lord Darzi, I believe, suggested 10 to 15 minutes in his review "Healthcare for London", and I understand that in a recent edition of "Woman's Hour" the president of the Royal College of Obstetricians and Gynaecologists recommended a maximum time for transfer of 20 to 25 minutes. In a recent interview on BBC Radio 2, no less a person than the Secretary of State for Health said
	"You shouldn't be going 20 miles. Twenty miles is a bit far."
	I entirely agree with him.
	It is precisely because of the dangers posed by a journey that can take an hour or more—as long as an hour and a half, depending on the traffic and the time of day—that we have been so concerned about the proposals from the outset. It emerged at an early stage in the consultation that the projections for journey times issued by the NHS locally were based on off-peak travel, but, having made the journey myself, I can tell the Minister with total conviction that it can take much longer than that.
	Last week I raised with the Prime Minister the case of little Hermione Bateman. Hermione was born in my constituency in the early hours of new year's day, some 11 weeks prematurely. She was delivered in the family bathroom by her mother, while her father waited outside for the ambulance to arrive. Fortunately she was rushed to our local district general hospital and into the accident and emergency unit, where she received specialist care. She survived, and although she has had a rough time, she is still with us and doing well. I believe that if she had had to be taken all the way to Hastings in the middle of the night, she could not possibly have survived—and that is just an example of the sort of thing that may well be happening 15 months from now.
	Nor are we simply talking about the health and well-being of newborn babies. In an e-mail, my constituent Mrs. Jane Booth-Clibborn wrote:
	"In March 2006 my daughter suffered an abruption in the 30th week of her pregnancy. She was rushed to the DGH where I was told that it had not been possible to save the baby but that they would do all they could to save her. Thanks to the medical and nursing team's prompt and skilful actions she survived but it was a close-run thing. Had she had to be taken to Hastings she would not be here today."
	I am sure that there are many other examples that I could quote.
	Clearly the proposals must involve, if nothing else, a higher risk of deliveries en route to Hastings. Even according to the primary care trust's own projections, there could be as many as 100 a year, which cannot be good news for patient safety. Buried in the decision made last month was a proposal for ambulance crews to receive intensive training in acute obstetrics. Could there be a clearer admission that more babies will be delivered in the back of ambulances?
	As part of my routine on Christmas morning I visit the emergency services, and as always this year I visited the local ambulance station. The crews whom I met were less than impressed with the suggestion that they should be trained to deliver babies in the back of ambulances on the way to Hastings. As I see that the hon. Member for Hastings and Rye (Michael Jabez Foster) is present, let me stress that the objection would be exactly the same the other way around. It is not as though there is a problem with existing maternity arrangements in East Sussex, as the Healthcare Commission's findings back in November show. The proportion of local women surveyed who said their care was excellent, very good or good was 90 per cent. during pregnancy, 88 per cent. during labour and birth, and 76 per cent. after birth.
	At the recent joint meeting in December, the two PCTs made two crucial decisions: for the single siting of consultant obstetrics and the special care baby unit; and for that site to be in Hastings. I have explained how the first decision flies in the face of the evidence. I can only imagine the relentless pressure that was brought to bear, particularly on the non-executive members, to come to that decision. In fairness, it should be noted that one or two of them did speak up against the proposals. Had one more voted the other way, the proposals would have been sabotaged. The non-executive directors are meant to speak up for local people, but in this instance they failed to do their job.
	However, the second decision—to single-site in Hastings—is even more inexplicable. The arguments about distance are, of course, precisely the same; that is why we have always argued to retain two sites. The deciding factor in favour of Hastings appeared to be social deprivation. The latest figures for deprivation in the whole county are depressing, and they are not simply a Hastings phenomenon. Those figures came out only a couple of days ago, and it seems that the national ranking for multiple deprivation has increased for every district in East Sussex; in other words, multiple deprivation has increased in all parts of East Sussex since 2004.
	There is often an assumption, particularly by this Government, that East Sussex is a wealthy, well-to-do and fortunate county. No doubt that is why we are so badly funded for older people's services, even though we have the highest proportion of over 85-year-olds in the country, and it might suggest why this blatant attempt to save money is directed at our facilities. However, I can tell the Minister that there are some significant areas of deprivation in our county—she is extremely welcome to come to the sunshine coast and see for herself. Some of them are in my constituency, and there are some in Hailsham, and other Members can talk about their constituencies. Almost 67,000 of the county's residents are income-deprived, and just under 25,000 experience employment deprivation. Eastbourne has dropped in the national ranking by 13 places since the last figures for deprivation were produced, nearly twice as much as Hastings, which has dropped seven places. There are pockets of serious deprivation across the county, including in my constituency—in Devonshire ward, for example.
	It is also significant that, despite the unfair image Eastbourne sometimes has in the outside world, there are more births per year in Eastbourne and they are set to rise, not least because of high rates of migration to the town, from Poland and elsewhere. The evidence is that there are more induced births, Caesarean operations and admissions to the SCBU in Eastbourne. I understand that that is largely owing to first-time mothers being on average older. The fact remains that both hospitals have high safety ratings.
	The other argument deployed is that larger units are somehow safer, but a single siting at Hastings would not necessarily mean that that unit would benefit from dealing with the existing combined total of births delivered at the two units. It is clear that more women would opt to go to Brighton, Crowborough or Haywards Heath or to have home births, rather than travel to Hastings.
	What would be the effect of the large new development at Pembury, which is bound to have a disproportionate effect on Hastings because of the geographical proximity? In another part of last week's answer to me, the Prime Minister said:
	"There are six new hospital developments in the whole of the region".—[ Official Report, 16 January 2008; Vol. 470, c. 922.]
	Well I do not know where they are. The only one I know about that is in any way close to affecting us is Pembury, unless the Prime Minister is suggesting that pregnant women from Eastbourne go to Oxford, Milton Keynes or wherever else in the region is fortunate enough to be getting a new hospital. What we do know is that the Pembury development is going to happen, because that announcement has been made, and that it is likely to take flows of patients away from Hastings.
	I do not wish to say much about the process involved in coming to this decision. I have called the consultation a sham before in this House, and nothing has happened in the interim to make me change my mind. It is worth reminding the House that as long ago as November 2006, the medical director of the hospitals trust, Dr. David Scott, was unwise enough to appear on TV to say that a decision to single-site had been taken six months previously. One therefore wonders why we wasted the time, effort and money in the interim having a public consultation that has not made a blind bit of difference to the outcome.
	It is also worth making the point that the way in which the consultation has been conducted has been to downplay consistently the overwhelming view of the public and of local doctors, to rubbish to proposals set out in option 5, which had been produced carefully by a combination of local people and clinicians on behalf of our campaign, and in effect to argue that mass opinion as expressed at public meetings and in petitions was somehow less important.
	In a masterpiece of drafting, the PCT produced an analysis of the consultation exercise in a document, which contrives to minimise almost entirely the overwhelming public and medical opinion in the area. In the latter stages of the consultation, as it became increasingly apparent which way the wind was blowing, the PCT was at pains to say that this process was not a vote as such and that it was just about asking people's opinions. Call me old-fashioned, but if one is asking someone's opinion on anything, one assumes that there is some purpose to doing so.
	It is possible that there will be an application for judicial review. If there is, that will be the time to go into detail about the procedures that have been adopted in this case. I should perhaps tell the House that only last week, Eastbourne borough council voted unanimously, on a cross-party basis, to support the legal costs involved in a possible legal challenge. Incidentally, such a process might also be a good opportunity to investigate precisely how much ministerial interference there has been in the decision for a single siting and, in particular, in the decision for the site to be located in the marginal Labour-held seat of Hastings and Rye.
	It is difficult to overstate the callous indifference to local opinion, the cynical manipulation of the consultation process and the ruthless determination to deliver a preset agenda that have all been exhibited by NHS bosses. Let me tell the Minister that it will take a long time to restore a sense of trust and confidence among my constituents in the people who are running our local NHS—indeed, there was a unanimous vote of no confidence in the PCT at our last march. I urge Ministers to re-examine this decision, taking into account all the aspects that I have mentioned and perhaps others besides. It may well be appropriate to refer this matter to the independent review panel.
	Next Monday, East Sussex health overview and scrutiny committee will meet. I will be amazed if it does not vote to refer the matter back to the Secretary of State. I am a little unsure—perhaps the Minister can tell me—about the procedure to refer the matter onwards to the independent review panel, but that sounds like a good idea to me.
	To conclude, the changes are not wanted by patients, doctors or local people. They are not based on patient safety or patient choice. They are based, I believe, on money and politics. A shameful decision has been made and, as a result, the lives of some babies and some mothers will be put at risk.

Charles Hendry: I congratulate my hon. Friend the Member for Eastbourne (Mr. Waterson) on securing this important debate. I am grateful that a number of us will have a chance to contribute.
	I agree with every word that my hon. Friend said. He has expressed perfectly the views of local consultants, GPs, the public and the local media. They have all been simply appalled by the decision to downgrade the facilities at Eastbourne district general hospital. I join my hon. Friend in commending the campaigns that have been run by Liz Walke and Margaret Williams on behalf of both hospitals. They have made sure that this has been one united campaign to put the case for the hospitals along the East Sussex coast.
	People in my constituency, which is right next door to Eastbourne, are mystified about how the decision has been reached. The area is fast growing. Hailsham is one of the biggest towns in inland East Sussex, and its residents would have a similar journey to the one outlined by my hon. Friend if they were required to go to Hastings or Brighton to have their babies. They are deeply concerned about that. In most cases, everything would be all right, but there would undoubtedly be anxiety at the time. A number of cases would be borderline, and some, we believe, would result in tragedy.
	In Sussex, we have an outstanding ambulance service. Paul Sutton, who runs it, is one of the most outstanding public servants I know, as well as one of the most inspirational public figures in the health service. Those in the ambulance service tell us openly that they are good at dealing with a stroke, a cardiac arrest or a road traffic accident, but they do not have experience in dealing with pregnancy complications. The Minister might say that they will be trained in those areas, but the whole argument has been that maternity cases should be dealt with by people who have a specific expertise in the subject and who have sufficient throughput of cases to ensure that that expertise is enhanced daily. Relying on the ambulance service to deal with the most borderline and marginal cases is not the right way forward.
	The decision also overlooks the fact that the part of the county affected will grow rapidly. We expect 10,000 new houses to be built in Wealden over the next 20 years, the bulk of which will be built in the area around Hailsham, Polegate and Willingdon. Further south are the south downs, while further north is the area of outstanding natural beauty—both areas are protected. We know that the population will grow. My constituents do not understand why, when we are experiencing such pressure from new housing and population growth, important public services, such as maternity services, are being reduced and downgraded.
	Let me say a little about the process. When it started, I called on the East Sussex Downs and Weald primary care trust and the West Sussex primary care trust to carry out a joint analysis of the case. This point is particularly relevant to the hon. Member for Lewes (Norman Baker) and his constituents, as well as mine. Our constituencies are right on the border of East and West Sussex. We were told that that joint analysis was not necessary, that they could readily follow on from each other and that the two were significantly separate. However, we have ended up with a big question mark hanging over the Princess Royal hospital in Haywards Heath, which is where people from Uckfield and the surrounding area in my constituency go to have their babies delivered. If that hospital were downgraded, which is possible, those people would prefer to go to Eastbourne rather than anywhere else. However, the fact that the decision about Eastbourne was made first means that that option is not available. If we were to lose the Haywards Heath facility, the 20,000 people in Uckfield would have to rely on the hospitals in Hastings or Brighton.
	I would love the Minister to join us in an attempt to drive into Brighton in the rush hour. It would not matter whether we started in Eastbourne, Hailsham or Uckfield, because she would quickly understand why the drive is simply not an option for a pregnant woman in an emergency. It is possible to reach the outskirts of Brighton quickly enough, but it can take another 30 or 40 minutes to get from there to the hospital in the city centre. The service is simply not good enough, and that is a source of profound concern to people expecting to give birth—a moment that is likely to be one of the most important in their lives.
	A further concern has to do with the conduct of the meeting at which the decision was made. It took place in Uckfield, in my constituency. We were told at the outset that it was not a public meeting, but that it was a private meeting being held in public and that members of the public were therefore not allowed to speak. However, especially unattractive was the sight of a bouncer—6 ft 4 in tall, and 20 stone in weight—who had been hired to shut up members of the public who dared to speak.
	The people who attended were predominantly elderly. They included midwives, nurses and GPs, and there were also a couple of Members of Parliament and a bishop in the hall. When my hon. Friend the Member for Eastbourne tried to address the meeting, the bouncer moved him to one side, but most despicable of all was having to see the Bishop of Lewes—a completely non-political figure, who speaks with passion about the community that he serves—also being moved aside when he attempted to speak at the end of the meeting.
	I remonstrated with the bouncer afterwards. We expect such behaviour in Zimbabwe, where bishops are regularly beaten up on behalf of the Government, but what have we come to in this country when a public quango has to be defended from a bishop by a bouncer? I hope that the Minister will agree that it is not acceptable for decisions to be reached in the way that I have described. People were rightly angry at the decision that was made, but the way it happened was an appalling abuse of power.
	I wrote to the PCT chief executive to remonstrate, and he responded by defending the right to have a bouncer present. For me, however, the fact that such a meeting could be conducted in that way will remain as one of the most horrific and abiding images of my time as a Member of Parliament.
	My constituents feel a great sense of confusion about why we are having this debate at all. We are in the 21st century, and Britain is the sixth richest country in the world. The south-east contributes more to the country's wealth than any other region outside London and, given our rapidly growing population, we should be investing in our health and maternity services and not allowing them to be run down.
	We appeal to the Minister to say, even at this late stage, that she believes the decision that has been taken is wrong. If it is referred to her, we hope that she will overrule it, as it is categorically wrong for all constituents across east Sussex.

Michael Jabez Foster: I am grateful to have this unexpected opportunity to contribute to this debate, and I apologise that I was not here when it began. Most especially, I apologise to the hon. Member for Eastbourne (Mr. Waterson) for not seeking his permission to speak, but I did not know that I would have the chance.
	I sympathise with what the hon. Member for Eastbourne has said, and he is right to suggest that I would be jumping up and down, screaming and behaving in an antisocial manner if the decision had gone the other way. With respect to him, however, he is wrong to suggest that the decision was in any way political. When the matter came up for debate, I approached Ministers and said, "Will you make sure that we do not lose our maternity facilities in Hastings?" They replied, "No, this is a matter for the PCTs. We will get involved only if the matter is brought to our attention subsequently."
	I am convinced that the judgment was not a political one. Indeed, I suspect that most members of the PCTs involved are card-carrying Tories. I know for certain that the chairman of the Eastbourne Downs PCT and some of the executive directors are leading Conservative figures, so it is bizarre to suggest that this was a political judgment. It may or may not have been right, but the idea that it was a Labour Government fix is entirely wrong. I hope that my right hon. Friend the Minister will discount that view entirely; it is simply not the case.
	It is important to know the history. Some time ago the hospital trust decided—the hon. Member for Eastbourne referred to this—that it would like to operate on one site. It decided that that site should be Eastbourne, because there was a business case for that. It took the view that if prospective parents lost the Eastbourne site, they would go to Brighton or somewhere else whereas parents from Hastings would have no choice. The business case was to have the site in Eastbourne, and I was outraged by the suggestion that finances should somehow affect the judgment of social need.
	Many of us believe that the right answer was to try to see whether it was possible to have a double site—a continuation of the site in Eastbourne and a consultant-led service in Hastings. That would have been my preferred option if it had been possible. Much of the campaign was about that. However, with respect to the hon. Member for Wealden (Charles Hendry), his local council voted in favour of a single site in Eastbourne. There was no unanimity. I hope I am wrong, but I believe that the council in Lewes also voted for a single site in Eastbourne.

Norman Baker: indicated dissent.

Michael Jabez Foster: Perhaps I am wrong; I do not know. However, local authorities at one end of the county took one view while authorities at the other end took another. There was a bit of a turf war and not quite the unanimity that the House has been led to believe there was.
	The real issue is whether the right decision was taken. Who should have received the benefit of the consultant-led service? There is no equality of value in the two claims. If it had been possible, I would have been happy to have had an Eastbourne consultant-led service and a Hastings consultant-led service, but I know that the Government are keen to improve maternity services and that they want greater coverage of consultants. We therefore asked the royal college a number of questions, and the answers that I heard were that there were no significant differences in the safety between small units of 1,500 and 3,000. That is an argument in favour of two sites, but the answers also said that there would be significant difficulties in recruiting and retaining consultants at very small sites. I do not know whether that is right or wrong, but that is what was said and it was a proper consideration for the PCT to take account of when deciding whether one or two sites would be feasible.
	Of course we would like two sites but if that is not feasible, one has to make a judgment on where the site should be. If the trust came to the view that there should be single site, I unashamedly believed that that site should be in Hastings. Why? It is not simply a question of social needs. The hon. Member for Eastbourne referred to the social needs of Eastbourne, and I am sure that there are pockets of deprivation there. However, Hastings is the 29th poorest town in Britain. The social needs are so significant that it would be bizarre to suggest that Eastbourne should be preferred to Hastings on social grounds. That is nonsense.
	I understand that Liz Walke and Margaret Williams, the leaders of the campaigns, did sterling work—Margaret Williams in the Hands off the Conquest campaign did exceptionally so—and I suspect that they reached an agreement that they would not give way on the two-site option. However, the PCT came to the view that there had to be a decision for one site. Once that was made, Hastings was clearly the right choice, and not just because of the social needs of the 29th poorest town in Britain
	There is also the problem of the difficult geography. Getting 21 miles along the Marsh road is a challenge, although the word "challenge" might be a euphemism. It is almost impossible to do the journey at the wrong time of day. It is a problem and we need to consider how it can be resolved. However, the geography is also in Hastings' favour. My constituents do not all live in Hastings; they live in Rye, Camber, Iden and to the east of Hastings, where they would have no option if they were required to go to Eastbourne in an emergency.
	I understand that the decision to save the accident and emergency departments at Hastings and Eastbourne, which was made some time ago, is an important factor. If there is proper training, true childbirth emergencies at the Eastbourne end of the county can be dealt with in accident and emergency, although that is not the preferred option. No one would go past an accident and emergency entrance if a mother was in distress. That is what I am told, but I would like the Minister to comment further on that, and to confirm whether that is the case.

Nigel Waterson: The hon. Gentleman is making an important point. Assuming that the loss of maternity services does not have a domino effect on accident and emergency and paediatric services in my local hospital, he is right to say that there is a real issue at stake: anaesthetists and those who are not gynaecologists or obstetricians may have to deal with difficult issues such as caesareans and related complications simply because there is not time to get the mother to Hastings. Does he agree?

Michael Jabez Foster: Yes, I agree that it is important that an arrangement be in place, so that there are facilities for dealing with such emergencies in the accident and emergency departments, which will continue to exist. Of course, that is not the first choice, because although it may well save the mother's life, the chance of saving the baby's life is smaller, unless expertise is readily available. That is understood. However, such cases are exceptional, although I do not say that the issue is unimportant. It is wrong to suggest that they will be a regular occurrence; they are exceptional occurrences, but we have to consider them when designing the scheme. I am sure that the hon. Gentleman has already written to the PCTs and the hospital trust, as I have done, to ask them what arrangements they intend to put in place to ensure that such emergencies are covered, if and when there is a single site—and it appears that there will be a single site in Hastings.
	Of course it is disappointing if it is decided that there must be a single site, but we must consider what will happen if that judgment has been made, and made properly. I believe that the consultation was very thorough. I am sorry to hear about the problems in the final meetings, and they need explanation, but the consultation was certainly long and thorough. The Government kept out of it completely. I have to say that I have a view about that: I would not leave the matter to the PCTs. I would have the judgment made by Government, but that is not how it is. That is not how things happen these days. We have to rely on the PCTs, and they came to that judgment.
	If the Minister accepts the PCTs' decision to have a single site, and if the Government's ambitions to improve maternity services and ensure greater consultancy cover make that inevitable, the PCT was right to decide that it should be in Hastings, but that should not be the end of the debate. The debate should now be about finding a way to ensure that those at the other end of the county in Eastbourne receive the back-up that is necessary if we are to ensure that there is no loss of life or discomfort as a result of the changes.

Norman Baker: I am pleased that the debate started early, as it gives me the opportunity to contribute. I apologise to the hon. Member for Eastbourne (Mr. Waterson), but I was caught slightly unawares and was two minutes late for the start. He and I do not agree on much, but we happen to agree on this subject, and I agree almost entirely with his comments this evening.
	Let me deal with the point about politics that the hon. Member for Hastings and Rye (Michael Jabez Foster) made. I do not know whether politics has played a part or not, but he is most insistent that it did not. I have no evidence that it did, but I point out to him that the recommendations resulting from the consultations on health services in East Sussex and West Sussex mean that facilities in the very few Labour seats in the area will be left intact, while those in Conservative seats and those that my constituents use will be lost. It is therefore not surprising that on that evidence, some people have reached the conclusion that politics may be a factor. Of course, it may be a complete coincidence, but that is the conclusion that they have reached.
	I am disappointed by the contribution of the hon. Member for Hastings and Rye. Of course he must stand up for his constituents; all of us in the House must do so. If we do not stand up for our area, who will? I thought the hon. Gentleman had recognised the value of the two-site option, but he seemed to be moving away from that in his contribution this evening.
	The campaign was extremely effective and embraced all sections of the community, which was heartening for all of us who believe in democracy and people power. I do not believe that the campaigning by Liz Walke in Eastbourne and Margaret Williams in Hastings was tactical. I think the campaign was based on an analysis of the facts and a genuine belief that a two-site option was the best solution for those involved in the health service and particularly for expectant mothers. That is what has been driving the campaign, not some sort of back-room deal to try to keep two sites going.
	The hon. Member for Hastings and Rye argued, rightly, that his constituents east of Hastings—his constituency stretches quite a long way east of Hastings—would have difficulty reaching Eastbourne. That is true, but there are constituencies west of Eastbourne—not least of all mine—which face a similar situation. I have constituents in Seaford, the biggest town in my constituency with 25,000 people, who are seeing maternity services at what they regard as a local hospital taken away from them. I have large numbers of people in Polegate who regard Eastbourne as their local hospital and who are seeing maternity services there taken away. I have in my constituency villages such as Alfriston, where people would take a similar view. They are to the west of Eastbourne.
	What are the alternatives for my constituents? As the hon. Member for Wealden (Charles Hendry) correctly said, a parallel, but not connected, process is going on that is leading to consideration of the maternity services at the Princess Royal hospital in Haywards Heath. Many of my constituents will look to Eastbourne or to Haywards Heath, but not particularly to Brighton, and they may find out that both Eastbourne and Haywards Heath are losing maternity services. It is a disgrace that there has been no connection between those two processes. The case for a connection was made early on, but as the hon. Gentleman rightly said, a disconnect was put in place so that no proper consideration has been given to the impact of the closure at the Princess Royal, if it goes ahead, on constituents in my part of the world or, I am sure, in Eastbourne and Wealden.
	The consequence if both go—it looks as though the Princess Royal at Haywards Heath may also lose its maternity services—will inevitably be to put more pressure on Brighton. As has been said, access to Brighton is extremely difficult. Nobody in their right minds would build the hospital where it is. They would build it on the outskirts, connected to the trunk road system. Instead, it has been built—some of it is pre-Nightingale—bang in the middle of town, on a very constrained site with little space for development other than upward. The site is difficult to access and already suffers extreme pressure. There are long delays at accident and emergency in Brighton, and sometimes at maternity services in Brighton. It not at all unknown for expectant mothers who turn up at Brighton to be referred elsewhere. It is not clear where they will be referred to in future if we have lost Eastbourne and Haywards Heath, and if we lose Worthing on the other side. Where will those expectant mothers go?
	The capacity of Brighton is a serious issue which I do not think has been factored into the decision by the primary care trust. If it has, it has been factored in incorrectly. I hope the Minister will pay attention and have regard to the situation at Brighton, which is entirely relevant to the future of the Princess Royal's maternity services and those at Eastbourne.
	The hon. Member for Hastings and Rye spoke about the medical professional advice. Of course the primary care trust and Members of Parliament must have due regard for that advice, which is extremely relevant and pertinent. There is a belief that in some ways it is safer to have a single site than two sites. I understand that argument, but it is not overwhelmingly convincing. There are medical experts on the other side who believe that a two-site option is safer. The judgment is at least marginal.
	What is not marginal, as the hon. Member for Hastings and Rye recognised, is that the travel distances across East Sussex to get from Eastbourne to Hastings or to get from Seaford to Hastings, to Haywards Heath or wherever it happens to be are extensive. I hesitate to say this as the hon. Gentleman might use it later, but the road from Eastbourne to Hastings is, as he says, not the most satisfactory road in the world for someone in an ambulance or for an expectant mother who has to get somewhere quickly. We all recognise that, yet people will have to rely on that road. It is no use the hon. Gentleman saying, "Well, we can sort it out in retrospect or bolt on something once we have decided to take away Eastbourne's A and E." That will not happen and he knows it. It is a county road and no way will the county council spend millions and millions of pounds to solve a problem on the A259 which has been exacerbated by the removal of a health service from Eastbourne. That simply will not occur.
	 It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.
	 Motion made, and Question proposed, That this House do now adjourn.— [Mr. Khan.]

Norman Baker: If the maternity department at Eastbourne goes, the consequences will be clear. People will be taken in ambulances and there will be more births en route—I referred to that in an oral question to the Secretary of State for Health a couple of months ago. We will have to ask ambulance service staff to exercise and demonstrate skills in which they have not been trained and which we should not expect them to acquire. Ambulance staff are wonderful—the paramedics and their ambulances are first-rate—but they cannot do everything and deal with every single complication, and some of the situations that arise will be extremely complicated. We should not ask them to do so.
	I turn briefly to the process. I agree with the thrust of the comments made by the hon. Members for Eastbourne and for Wealden. What has not been mentioned so far is that on the day of the meeting in Uckfield, the strategic health authority was meeting in Horley, expecting to ratify the local primary care trust's decision. So secure were the SHA representatives in their knowledge of what the primary care trust was going to do that they had the recommendation, which had not even been discussed by the PCT, in front of them and were even prepared to meet early, before the PCT had reached its decision. The SHA representatives sat by the phone; as soon as it rang, they immediately ratified the PCT decision without much ado. If we want a definition of a rubber stamp, that is it.
	I should also point out that in theory the SHA meeting was public, but even if the roads between Uckfield and Horley had been fantastic, people would not have been able to travel between both places in no time at all to be represented at both the PCT and the SHA meetings. Plenty of people wanted to be at both meetings, but they could not be. That is a travesty of democracy and an insult to the public. It is a way of saying, "The public consultation doesn't matter. We've got our little deal behind the scenes and are going to push it through. If you can't get there, that's tough." That is an insult to all those people who have marched through Eastbourne and elsewhere, attended public meetings and signed petitions. Frankly, the Government should tell the PCT and SHA to conduct themselves in a more seemly manner. The hon. Member for Wealden mentioned the bishop and the bouncer—the soundbite of the debate, and rightly so. It is appalling that a bishop and Members of Parliament can be shoved aside by a bouncer acting on behalf of an unelected quango that has made a decision that has no public support in the area that it is supposed to represent.
	I hope that the Minister will not trot out the usual stuff about this debate being about a PCT decision that is taken in everybody's best interests. That is not how it seems in East Sussex. I hope that she will listen to the voices coming not only from my constituency and those of the other Members here, but from many thousands of people in East Sussex who have participated in a consultation exercise in good faith, done their best to make their case and put together an extremely good case, but have been thrown aside in a process that has treated them with contempt.

Dawn Primarolo: I congratulate the hon. Member for Eastbourne (Mr. Waterson) on securing this debate about the future of national health service maternity services in East Sussex, a matter of great concern to him and his constituents. Like the other hon. Members who have spoken in this debate, he has raised the issue repeatedly. I appreciate the comments that the hon. Gentleman and others have made. It is a testament to the enduring popularity and success of the national health service that we have institutions that are held so dear by the people whom they serve. As I am sure that the hon. Gentleman has repeatedly acknowledged and would want to confirm today, that is a huge compliment to the NHS locally and to those who work within it to provide the best possible care for their patients.
	That means, however, that talk about potential change often triggers huge public interest and debate, which is of course important. I recognise that change can be difficult and acknowledge that it provokes powerful reactions. Nevertheless, I would say to hon. Members that having decided to devolve the decision on these issues to a local level, the consultation process must be left to take place without interference from Westminster. I understood that principle of devolution to be supported by Members from both Opposition parties who have spoken in the debate.
	When people talk about the reorganisation of services it is often suggested that it is about money, as has been asserted today. Let us therefore be clear about the position of East Sussex Downs and Weald primary care trust. In 2006-07 and 2007-08, its budget was increased by £70 million, it is 2.6 per cent. above its fair funding allocation, and in 2008-09 it is to receive an extra £25 million. It is not about money, nor is it about politics—that is, frankly, a ridiculous proposition. It is interesting how, when we respond to debates on different parts of the country, the allegation of political interference that Opposition parties make against the Government flexes in terms of whether they are in favour of or against the decision.
	I know that my hon. Friend the Member for Hastings and Rye (Michael Jabez Foster) was disappointed by my reply when he and other Members from the area wrote to me asking to make representations to me before the local process has been completed. I have been clear that I am unable to meet to take those representations and express an opinion while the process continues.
	It is not about politics—it is about saving more lives, providing better, safer services, and making care more convenient. That desire to see better outcomes for patients—increased safety and quality in care, allied with increased funding—is ultimately driving considerations of change.

Charles Hendry: Will the Minister give way?

Dawn Primarolo: I wonder whether I could make a little progress. It has been a long debate. I will gladly give way to the hon. Gentleman if he will first let me finish this point.
	For example, some doctors have told us—it has been touched on in the debate—that specialist care needs to be concentrated in centres of excellence so that clinicians have the right expertise, experience and equipment and can treat those most in need quickly, safely and conveniently. Delivering the best possible services for all women and their babies will mean that changes will have to take place.

Charles Hendry: I am mystified by the Minister's reference to convenience. Closing down a hospital or a service and requiring people to go an extra 20 miles can scarcely be more convenient. During the first Sunday in June last year, the maternity facility at Eastbourne was full and had to close, and by the end of that day the maternity facilities at Hastings, Haywards Heath, Crowborough, Brighton and Worthing had also closed to new mothers. How can she say that we have to centralise these things when, on occasion, we do not have enough capacity at the moment?

Dawn Primarolo: I am not saying, as the Minister, that we should centralise these services—I am advancing to the House the argument that is put to the Government by clinicians and those who are expert in this area, and setting the scene.
	Pregnant women talk about the services that are most convenient to them, as they have always done. Those services might be home delivery or midwife-led services, and where necessary, they might involve the centres of excellence we are talking about. I also have to say that this is one of the safest countries in which to give birth; the quality of services and the changes being made have continued to build on that excellence and safety. I absolutely accept that the point of today's debate is to consider the proposals being put forward relating to this change and whether it will deliver the best possible service for all women and their babies in that area.
	That is precisely why the Government published "Maternity matters: choice, access and continuity of care in a safe service" last year. It is our strategy and our intention to modernise maternity services, placing safety, quality and the improvement of standards of care at the very heart of our vision. That is exactly what the Government have always said to this House. The process of improving services is continuous; it means that we have to look to the next stage review, which includes a specific maternity and newborn care pathway, in taking this forward.
	I listened very carefully and with great interest to the points made by hon. Members on the consultation on maternity services in East Sussex, which I understand had been going on since 26 March, and ended on 27 July 2007. I also understand that, following consultation, East Sussex Downs and Weald PCT and Hastings and Rother PCT, referred to by my hon. Friend the Member for Hastings and Rye, announced on 20 December last year the decision to develop a single-site option for consultant-led services in East Sussex based at the Conquest hospital in Hastings. The special care baby unit and in-patient gynaecology services will also be based on the same site.
	Under those proposals, Eastbourne hospital would continue to provide a midwife-led service—across the entire NHS, most women have an experience of giving birth safely and with support thanks to such services—and, in conjunction with the East Sussex Downs and Weald PCT, it intends to increase the provision of community midwifery services throughout East Sussex. It will do so to ensure that women do not end up going to hospital when they do not need to, and that they are supported in their homes. I am sure that the hon. Member for Eastbourne would support that.
	We have always been clear that changes to service provision should be initiated only when there is a clear and strong clinical basis for doing so. I absolutely acknowledge that there might not be 100 per cent. agreement, and that doctors may have differing views, but in this instance the clinical case for change was based on the ability of a single, larger unit to provide safer, better-quality services, and on concerns about the sustainability of consultant-led services at the Conquest and Eastbourne sites. There was a recognition of the challenges, and the fact that they needed to be addressed.

Norman Baker: Will the Minister say whether she believes that that clinical assessment took into account the objections raised by hon. Members in this debate, including the difficulty of travelling and the capacity problems at Brighton?

Dawn Primarolo: I shall come to the hon. Gentleman's point when I deal with the point at which the decision becomes a matter for Ministers to consider, as opposed to when the process of decision making and consultation is dealt with locally. I know that he has been a great champion for the devolution of decision making in a whole range of policy areas, not just the health service, and that he accepts the principle in this case. I accept that he is totally dissatisfied with the outcome of this process. However, the principle must be, as the Government clearly set out, decisions and consultations undertaken locally and based on local opinion, need and advice to ascertain what is best for that area. I will deal with what the process will deliver next shortly.
	As my hon. Friend the Member for Hastings and Rye said, in evidence to the East Sussex health overview and scrutiny committee the Royal College of Obstetricians and Gynaecologists said:
	"It would be very hard for a unit delivering under 2,000 births a year to offer adequate training opportunities for junior doctors".
	Neither the Conquest nor the Eastbourne sites currently deliver 2,000 births a year.
	Furthermore, the East Sussex PCTs established a new options panel in response to the points that were made locally in the consultation about different approaches. The hon. Member for Eastbourne mentioned that. The new options panel was independently chaired by Professor Stephen Field to appraise clinically all the emerging alternative options that were submitted during the consultation. They included an option submitted by local campaigners for a consultant-led service on both sites. I have been informed that it was given full consideration by the PCT boards but did not prove to be the preferred option.
	I am aware that the hon. Members present in the Chamber played an active role in the consultation process and I appreciate that they are dissatisfied with the outcome. They have made their feelings clear. However, reconfiguring the service will enable the local NHS to maintain safety and allow a single, bigger unit to offer improved quality of service at the Conquest hospital in Hastings. The Eastbourne unit will continue to provide ante and post-natal clinics and midwife-led care.
	As the hon. Member for Eastbourne knows—he referred to the matter—the decisions made by the PCT boards are subject to scrutiny by local authority overview and scrutiny committees. That has not happened yet. Those committees comprise locally elected councillors whose role is to consider issues that affect the health of local people. When the OSCs are unhappy with the consultation process, or do not believe that the proposed changes are in the interests of the local health service, they can refer the proposals to my right hon. Friend the Secretary of State for Health for final decision and, if necessary, to the independent review panel. Given that the meeting will take place on 28 January and that the outcome needs to go through a proper process of review and independent consideration, it would be incorrect for the Government—indeed, it would constitute the very political interference about which the hon. Member for Lewes (Norman Baker) complained—to express an opinion or make a decision while the democratic process is going on.

Nigel Waterson: On that point of procedure, what criteria, based on recent experience, would make the Secretary of State unlikely to refer such a decision to the independent review panel? How many decisions get referred, proportionately?

Dawn Primarolo: I am happy to write to the hon. Gentleman specifically on that, but I understand that the Secretary of State has made it clear that decisions on reconfiguration that were not concluded would be referred to the independent review panel. I will ensure that that is correct and write to all hon. Members who have spoken in the debate. I know that, because of the expertise of the hon. Member for Eastbourne on such matters, he will understand that the process is independent, without political interference and based on revisiting all the issues, especially the clinical ones. The independent review panel is the final arbiter and the Secretary of State accepts its decisions. I think that covers the point that I was going to make.
	What is obviously important, for every hon. Member who has spoken and for the health community in East Sussex, is, as the PCT has clearly said all along, to ensure strengthened antenatal and post-natal care across East Sussex, to develop more community outreach services and to ensure that pregnant women have access as quickly as possible to the high-quality intensive care that may be necessary. We are all required to ensure that maternity services remain a priority in East Sussex. I am sure that the hon. Gentleman will join me in welcoming the proposals regarding more support in the community for those parents who choose it, and access to the midwife-led units.
	My final comment is about the various issues that the hon. Member for Wealden (Charles Hendry) raised with regard to a public meeting during a public consultation. He reported to the House that, in his opinion, the behaviour of some at that meeting would have been discourteous and inappropriate when directed towards any member of the public, let alone the person whom he cited. I have no knowledge of that, but it has now been raised. I certainly intend to take the issue away, because it is an entirely separate point, and to seek suitable explanations. Again, I will write to all hon. Members who have spoken on that, because if what the hon. Gentleman described turns out to be true, we would all want to be sure about how public consultations would be conducted in future by any public body, even in such difficult circumstances, where feelings are running high on both sides. Everybody—the PCT, Members of Parliament, the local community and the health community—is motivated to do what is best by those whom they serve. That is the principle that we must remember.
	 Question put and agreed to.
	 Adjourned accordingly at twenty-three minutes past Seven o'clock.